Joey Batts Gets Defensive?

BusinessWeek interviewed Joe Battipaglia because he is taking a more defensive posture on equity allocation.

For conservative accounts equity exposure drops to 25% from 50% and risk tolerant investors go to 70% from 85%. Has Joe ever made a correct bearish call? I'm not being a wise guy, I really don't know. I can't recall him ever having made this type of call before, at least not publicly.

I have to wonder (or maybe hope) that his call could be a bottom, but I don't think so.

His actions with foreign are interesting. For conservative the foreign weight goes to 5% and for growth investors it goes to 13%. What is interesting is that 2/3 of the foreign exposure is to emerging markets with the EEM ETF. I don't think this is necessarily too much emerging although if they had zero emerging previously I'd have to wonder whether that's a good trade. I am also surprised there is no stock picking for the growth investors.

Long time readers know I use ADRE for some lower risk clients, individual stocks for some more risk tolerant clients but a blend of both for most clients.

Joe is also suggesting gold as a 15% weight for conservative investors with the gold ETFs. I maintain gold exposure at all times for clients but usually smaller than 15%, a lot smaller. I like the idea of gold but I would be very nervous about going from zero to 15% (if that's what he's doing, the article does not say) after such a big run.