It's a classic dilemma and one that investors spend a surprisingly large amount of time dealing with: how to invest when the data seem to suggest the market is "late" in a bull market cycle?

There are no changes to the DAA lineup for August. Read on for the full details.

DAA is a core portfolio strategy that is designed to help SMI readers share in some of a bull market’s gains while minimizing (or even preventing) losses during bear markets. The strategy involves using exchange-traded funds to rotate among six asset classes, holding three at any one time. DAA is a defensive strategy that nonetheless has generated impressive back-tested results, demonstrating the power of "winning by not losing."

The recommended categories/ETFs for August remain (in order of current momentum):

There is no change being made to the official SR recommendation for August. Read on for the details.

Sector Rotation is a high-risk/high-volatility strategy. While its peaks and valleys have been more extreme than SMI's other strategies, it has generated especially impressive long-term returns, as discussed in Sector Rotation is Risky, But Highly Rewarding.

After spending the first quarter of 2018 worrying about the return of inflation and volatility, investors found a new concern to obsess over in the second quarter: the possibility of a global trade war.

But unlike February, when the stock market responded to those earlier investor concerns with its first -10% correction in two years, stocks largely shrugged off these new worries and moved higher in the second quarter, with the Wilshire 5000 index gaining +3.8%. Volatility has retreated back to historically low levels and from all appearances, the bull market seems to be back on the march.

Why Upgrade?

SMI offers two primary investing strategies for “basic” members. They are different in philosophy, the amount of attention they require, and the rate of return expected from each. Our preferred investing strategy is called Fund Upgrading, and is based on the idea that if you are willing to regularly monitor your mutual-fund holdings and replace laggards periodically, you can improve your returns. While Upgrading is relatively low-maintenance, it does require you to check your fund holdings each month and replace funds occasionally. If you don’t wish to do this yourself, a professionally-managed version of Upgrading is available.

SMI also offers an investing strategy based on index funds called Just-the-Basics (JtB). JtB requires attention only once per year. The returns expected from JtB are lower over time than what we expect (and have received) from Upgrading. JtB makes the most sense for those in 401(k) plans that lack a sufficient number of quality fund options to make successful Upgrading within the plan possible. Here are the funds and percentage allocations we recommend for our Just-the-Basics indexing strategy.

I'm not a soccer fan, but I'm also not one to miss the opportunity to work a sports reference into an SMI article. So in light of this weekend's World Cup finale, which France won by defeating Croatia 4-2, I'm reminded of a soccer study with implications for investors that came out a dozen years or so ago.

In “Action Bias Among Elite Soccer Goalkeepers: The Case of Penalty Kicks,” a study done at the Ben Gurion University in Israel, researcher Michael Bari-Eli studied the behavior of goalies trying to stop penalty kicks. For the non-fans among us, here's the setup. Penalty kicks in soccer are taken from 12 yards away, and the kicks reach speeds of nearly 100mph. So there's essentially no time for the goalie to react to the kick — he has to decide to jump to the right or left before the kick is taken.

There is one change to the DAA lineup for July. Read on for the full details.

DAA is a core portfolio strategy that is designed to help SMI readers share in some of a bull market’s gains, while minimizing (or even preventing) losses during bear markets. The strategy involves using exchange-traded funds to rotate among six asset classes, holding three at any one time. DAA is a defensive, low-volatility strategy that nonetheless has generated impressive back-tested results when evaluated over full market cycles, demonstrating the power of "winning by not losing."

The recommended categories/ETFs for July are (in order of current momentum):

There is no change being made to the official SR recommendation for July. Read on for the details.

Sector Rotation is a high-risk/high-volatility strategy. While its peaks and valleys have been more extreme than SMI's other strategies, it has generated especially impressive long-term returns, as discussed in Sector Rotation is Risky, But Highly Rewarding.