Tactical ETF Portfolio Shift Commentary 11/14/2011

At the broad asset class level, we have pared our modest equity overweight back to neutral to lower risk and take profits following the substantial rally in risk assets since the beginning of October. Back in early August, we added equities based on our belief that the market had overpriced the prospects of a near-term recession and a 2008-like collapse. While US economic data has improved and third quarter earnings were supportive, we believe there is limited near-term upside at current levels given the uncertainty surrounding the US budget debate and European sovereign debt issues.