Tactical Stock Strategy (TSS)
The Milwaukee Company’s Tactical Stock Strategy (TSS) is a rules-based strategy that selectively holds up to 50 stocks found in the Russell 1000 Index, a large-capitalization U.S. equity benchmark.
Between 25% and 50% of TSS’ portfolio is invested in stocks found in the Russell 1000 Value Index. The balance will be invested in either (i) companies included in the Russell 1000 Growth Index, when the U.S. economy is expanding; or (ii) in bonds, when the U.S. economy is contracting.
The portfolio weights for growth stocks, value stocks, and bonds are determined by signals from The Milwaukee Company Economic Index (MCEI) and Growth-Value Indicator (MCGVI) (see sidebar) as follows:
The number and type of stocks are identified based on a proprietary methodology that evaluates the outlook for both the individual companies and the overall market.
Stocks selected from the Russell 1000 Value Index have (i) the lowest price-to-earnings ratios; (ii) “high” returns on average equity; and (iii) market capitalization of at least $10 billion.
The growth stocks selected from the Russell 1000 Growth Index and target companies are those with (i) the strongest trailing 6-month returns; and (ii) at least $5 billion in market capitalization.
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Growth companies exhibit above-average growth potential for the foreseeable future.
TMC defines “value” stocks as well-established, stable businesses trading at prices below estimated worth, based on fundamentals, such as earnings, sales and dividends.
Milwaukee Company Economic Index (MCEI)
MCEI seeks to identify the current state of the U.S. economy by evaluating the Chicago Fed National Activity Index and a probit model of leading economic indicators.
Milwaukee Company Growth-Value Indicator (MCGVI)
This tactical indicator is calculated using relative performance of the Russell 1000 Growth and value indexes over trailing 1-year periods and measures the current performance relative to its history.
The Milwaukee Company℠ is a tradename of Estate Counselors, LLC. The information provided herein is believed to be correct and has been obtained from sources that we consider reliable, but we do not guarantee that this information is accurate or complete. All expressions of opinion reflect our judgment at the present time, but are subject to change. Nothing found herein is intended to be a substitute for personal investment advice. The investments discussed herein are risky in nature and involve a substantial risk of loss, and we do not in any way warrant or guarantee the results you will experience.