In other words, realize some of your unrealized gains.
It's likely that investors will experience more gains this year, Fried says, but expect increased volatility, especially closer to mid-term elections. So he is taking advantage of upturns in the market to trim positions in dividend-yielding stocks; he likes names such as Verizon Communications (symbol: VZ) and ConocoPhillips (COP).
Fried and his partners believe the multi-decade bull market in bonds "is pretty much over. Right now, we are trying to manage to interest rates," potentially rising because the new Federal Reserve chair, Janet Yellen, has signaled continued easing of the central bank's bond purchases.
Fried aims for allocations of about 25 percent in fixed income and 55 percent in equities, with the remainder in cash.
For client bond portfolios needing income, Fried likes to invest using exchange-traded funds such as SPDR Barclays Short Term High Yield Bond ETF (SJNK) and the SPDR Barclays High Yield Bond ETF (JNK) - both of which invest in so-called junk bonds - and the SPDR Blackstone/GSO Senior Loan ETF (SRLN).
He hedges moves in the bond portfolios for his clients using ProShares UltraShort 20+ Year Treasury (TBT), which seeks two times the inverse (or opposite) of the daily performance of the Barclays Capital U.S. Treasury 20+ Year Treasury Bond Index.
A statistical bounty. For market-data junkies like myself, every quarter is a bonanza when JPMorgan issues its "Guide to the Markets," available to the public on its website.
Chock-full of statistics, the guide illustrates a comprehensive array of market and economic histories. Clear, compelling charts help provide a sense of long-term trends.
Here's a link to the downloadable version: http://goo.gl/0ShAu.