No, not really, but…  The following two summaries, issued this week, from two programs that I use for clients’ money, will give anyone pause. I’ve removed the names to protect the innocent…

The first reads as follows:

_________ issued the following statement regarding today’s new allocation:

• We made adjustments to the portfolios consistent with our belief in continued global growth, more volatile interest rates and a pickup in mergers and acquisitions.
• We increased exposure to Mid-Caps and Small-Caps stocks. These securities are more likely to benefit from an increase in mergers and acquisitions than Large-Caps.
• Investors are paying up for companies that are able to deliver above-average growth and thus making growth stocks attractive. Consequently, we are taking a slightly growth-bias within the portfolios.
• Our fixed income allocation is skewed toward a more intermediate duration-bias given our belief that the likelihood of a continued flight-to-quality scenario lends itself to a more aggressive duration positioning.

The second reads as follows:

__________ issued the following statement regarding today’s allocation changes:

“With the markets selling off more than 5% during the last trading window, all price trend measures within the ______ Investment Model are now off. All market breadth measures confirm the negative movement, and the ______ Model is signaling for its highest risk market environment. With the high risk and uncertainty in the market, all profiles are currently in their most defensive allocations based on risk tolerance. With all components within the model continuing to move into negative territory, we will need to see significant improvement in market price movements, as well as confirming underlying market breadth data before we begin to add new equity allocations. Until that time we will continue to monitor the market and model and wait for a better investment opportunity.”

I interpret this apparent contradiction with little concern, since the folks with the first summary are focused exclusively on a long term, buy-and-hold approach. The second group have all clients’ money in ETFs and have built their reputation on their ability to make quick and nimble adjustments to short term signals in the markets. They won’t ever hit any home runs but they’ll never strike out either.

Both are valid approaches to investment management. Both are responding to what they see going on globally as it relates to their investment mandate. But if you are unaware of the many variables at work, how will you decide where to put your money?