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New Orleans, LA 70130 (504) 459-4391

gossadvisors.com

Portfolio Updates Date: 3/3/2020

From: Ryan Geschke, Director of Investments

Subject: Portfolio Changes – D.A.L.I. Dorsey Wright Changes, Tactical Tilt, TAG & Blackrock Multi Asset Income

D.A.L.I. – Dynamic Asset Level Investing Dorsey Wright’s technical, point-and-figure and relative strength charting is a primary engine behind our investment management at Goss Advisors. A recent change in asset strengths within DALI (explained below) led to a few significant trades in our model portfolios. While equity markets loudly retreated last week, bond yields reached historic lows, resulting in a widespread fixed income rally. This led the fixed income broad asset class to move into the second ranked position in the Dynamic Asset Level Investing (DALI) tool for the first time since August of 2016, overtaking international equities for the first time since November of 2016. Piggybacking off a generally difficult year for international equities and a generous series of rate cuts, the fixed income group actually began chipping away at the margin of leadership held by international equities over a year ago, eventually leading to this ranking change. Depending on implementation/discretionary practices, those following an aggressive or moderate DALI tilt strategy need not make any changes; however, those following the conservative strategy should note the new allocation to fixed income. A historical view of the relative strength relationship between international equities and fixed income as demonstrated by their respective buy signals is shown below as well.

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Tactical Adjusted Growth • Within the Relative Strength sleeve of the TAG, we invest in the top 2 ranked DALI asset types. Fixed

Income recently surpassed International Equities in ranking. • As a result, we are selling SPDR Developed World ex-US (SPDW) and SPDR Emerging Markets (SPEM)

and purchasing PIMCO Enhanced Core Fixed Income Model. • Proceeds will be used to purchase the PIMCO Enhanced Core Fixed Income Model

Dorsey Wright Tactical Tilt Conservative

• Due to the recent DALI ranking changes, we are liquidating the international holdings and moving proceeds to fixed income

• As a result, PIE, PIZ and IFV were liquidated. Proceeds were used to purchase an equal weighting of DWFI and AGG in the portfolio.

BlackRock Multi Asset Income • Reduced high yield and investment grade bonds in favor of holding more in cash • Importantly, the portfolio was already conservatively positioned heading into the latest bout of

volatility given our less favorable view on stock and bond prices and the potential for less upside. Our preference is to be even more cautious in the near-term due to uncertainties around the Corona virus. We are thus seeking to reduce risk and hold higher levels of cash as we assess the impact of this shock. Credit fixed income has held up relatively well compared to equities and relative to past episodes of

For internal use only. Not for distribution to clients

economic slowdowns, and we are concerned spreads could widen meaningfully if the outbreak worsens. Therefore, we are reducing exposure to high yield and investment grade bonds.

• BlackRock MAI liquidated its holdings in iShares Investment Grade ETF (LQD) and reduced iShares 0-5 Year High Yield Corp (SHYG) from 9% down to 6%. Proceeds from this sale are held in cash, which is now an 8% overall allocation.