Chris Ciovacco

About the Author Chris Ciovacco

Chris Ciovacco is the founder and CEO of Ciovacco Capital Management (CCM), an independent money management firm serving individual investors nationwide. The thoroughly researched and backtested CCM Market Model answers these important questions: (1) How much should we allocate to risk assets?, (2) How much should we allocate to conservative assets?, (3) What are the most attractive risk assets?, and (4) What are the most attractive conservative assets? Chris is an expert in identifying the best ETFs from a wide variety of asset classes, including stocks, bonds, commodities, and precious metals. The CCM Market Model compares over 130 different ETFs to identify the most attractive risk-reward opportunities. Chris graduated summa cum laude from The Georgia Institute of Technology with a co-operative degree in Industrial and Systems Engineering. Prior to founding Ciovacco Capital Management in 1999, Mr. Ciovacco worked as a Financial Advisor for Morgan Stanley in Atlanta for five years earning a strong reputation for his independent research and high integrity. While at Georgia Tech, he gained valuable experience working as a co-op for IBM (1985-1990). During his time with Morgan Stanley, Chris received extensive training which included extended stays in NYC at the World Trade Center. His areas of expertise include technical analysis and market model development. CCM’s popular weekly technical analysis videos on YouTube have been viewed over 700,000 times. Chris’ years of experience and research led to the creation of the thoroughly backtested CCM Market Model, which serves as the foundation for the management of separate accounts for individuals and businesses.

Expect More Uncertainty Related To Fed


In a speech Monday to the Economic Club of New York, Federal Reserve Vice Chairman Stanley Fisher tried to shift focus away from the first rate hike and toward the process of rate normalization. From Reuters:

Much of his speech to the Economic Club of New York focused on the period after rates rise from near zero, which Fischer said could be “June or September or some later date or some date in between.” Afterward, he said, the Fed would tighten or even loosen on a meeting-by-meeting basis based on economic data and unexpected geo-political risks. Explicit policy promises, he said, would play less of a role. “Whatever the state of the economy, the federal funds rate will be set at each FOMC meeting,” Fischer said of the policy-making Federal Open Market Committee.

Indecisiveness Remains

It is typical for markets to become a bit fussy when the Fed is on the verge of shifting policy. The stock market has been following the indecisive script. As shown in the chart below, the broad NYSE Composite Stock Index has been quite volatile and moving sideways for nine months.

Risk-Off or Risk-On?

As the Fed postures, market participants have been jumping back and forth relative to their preference for more-conservative fixed income instruments (TLT) and growth-oriented stocks (SPY). If I invested in TLT in July 2013 and you invested in SPY, there would be no winner as of March 2015 (see below).

Investment Implications – The Weight Of The Evidence

The wild swings between risk-on and risk-off are part of the interest rate cycle equation. Our approach is to implement a “less is more” strategy until the market calms down a bit. Less is more refers to making fewer adjustments to our allocations during binary periods of risk-on and risk-off. Our market model governs our allocations and at some point action is and will be required. For now, we continue to hold an equity-heavy allocation with some offsetting exposure to bonds and currencies. As noted in a March 23 article, the big picture does not align with “a bear market is imminent” scenario, which allows for some patience with growth-oriented positions.

Image of doors from Tim Green via Flickr.

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