Dorsey: Stay Long US; Spain & Switzerland Best Of Europe

June 30, 2014 As an asset class, what about fixed income and commodities? Where do they currently sit based on your indicators?
Dorsey: Fixed income is ranked No. 3. Commodities are ranked zero, last, No. 6. The way we look at it is that we'll take strategic allocation, and we will be willing to go with the minimums that strategic allocation suggests. From the minimums to the maximums, that's where our tactical work comes in.

What's left in that bucket of money will begin pouring into the No. 1, No. 2, No. 3 asset classes. We'll never get down to five and six, which now, cash is ranked No. 5; commodities is ranked six. Getting down to specific ETFs, last quarter, your top three were RSP, GULF , then EWP. Are they still your top three right now?
Dorsey: Yes. These things are long term in nature. They don't change overnight. In fact, you know the old market adage, that the market likes to climb a wall of worry. You've got nothing but worry in the Middle East, right? Exactly the place that no one would invest, no one would ever think of investing, but it's the place you need to be investing. So the Middle East is still right up there, and Spain is too. RSP is still ranked No 1. You mentioned turmoil in the Middle East. Right now, you've got this precarious situation in Iraq. How does geopolitics play into your model?
Dorsey: It cannot play into the model, because what are you going to do with geopolitics? When Egypt was blowing up, and you wouldn't look at Egypt and you were saying, "I won't even go there on vacation," that was the place to buy it. EGPT was the play of the century. The same with Greece. It was over for Greece, totally bankrupt, we'll never know Greece again the way it used to be. Oh my God, it's the worst place to be. It was exactly the place you should have invested.

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