My bond strategy has always had a position in TLT until last week.? TLT, composed of long Treasuries. is a hedge against deflation, and has made money for my clients.

I changed last week because of significant disagreements at the Fed regarding the duration of QE, and also the selloff in the long end breaking my price drop limits.? Also, it is worthy of note that each Fed intervention is leading to smaller results.? In the process, I made more money from my credit-sensitive investments than I lost from TLT.

With stocks, I am not a technician or an active trader.? With bonds, I am both.? Why?

Bonds are more determinate than stocks and the tradeoffs are clearer.? Bonds are promises to pay under certain conditions.? Those conditions can be analyzed more readily than the open-ended conditions of stocks.

At this point in time, I am taking limited domestic credit risks, and taking larger risks in the emerging markets, where economic policy is more orthodox then it is here.

But beyond that, I have pulled in my horns, and have reduced interest rate risk.? If I see opportunities, I will act on them, but I am taking far less risk than previously.