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TACTICAL ASSET ALLOCATION

Since 1979, BTS has employed Tactical Asset Allocation with the goal of preserving capital during market declines, reducing investment volatility and producing enhanced investment returns with less risk. "Buy and hold" investment strategies assume that investors have the time and flexibility to wait for the market to recover. The reality, however, is that declining investment values can also result in declining income distributions. Individuals who need to replace income may not be able to simply "buy and hold."

A smart defensive strategy in declining markets is a sell-side discipline. In a declining market, it enables investors to preserve capital and potentially avoid a large loss. It also positions investors to take advantage of a recovering market by using their capital to purchase more shares at a lower price.

An effective tactical strategy requires the elimination of human emotions and bias from the decision- making process. Utilizing sophisticated analytical modeling techniques, BTS has developed proprietary modeling tools that seek to identify intermediate to long-term market trends.

We watch the markets so that investors don't have to. At any one time, a BTS tactical portfolio can be fully invested in the market in an attempt to take advantage of market growth, or 100% in cash in order to protect principal by guarding against potential market decline. In general, we try to be in the market for 75% to 85% of an uptrend, and out of the market for 75% to 85% of a downtrend. This approach, if successful, has the effect of reducing the volatility and "smoothing out" the road so that investors can reach their goals.