NEW YORK (MainStreet) —With the market rallying and setting new record highs again with the Dow topping 18,000 at market close on Tuesday, investors should take this opportunity to allocate all of their retirement funds in the S&P 500.
By the end of 2014, the S&P 500 will reach 2,150 and could go as high as 2,500 by the end of 2016, making it a good tactical approach for investors, said Matt Tuttle, CEO of Tuttle Tactical Management, the Stamford, Conn. company which provides customized tactical ETF-based investment strategies and exclusive asset management. He also believes in a sustained Santa Claus rally.
“They should stay in equities until the trend changes,” he said. “You can’t predict it.”
Since December is traditionally a good month for the market, investors should expect new highs to occur, Tuttle said.
“Recently, headlines have noted that this is the worst year for active managers in decades,” he said. “They all need to catch up before year-end and as such, they will buy on all dips, which will not allow the market to make a big downturn until at least next year.”
Tuttle recommends that 100% of his clients’ 401(k) accounts should be allocated in the S&P 500 as long as they are willing to take a tactical approach right now.
“The key point is you have to be willing to do something different when the trend changes,” he said. “The market will tell you what to buy. We’ve been in a bull market for long time, and you can’t be in one forever.”