January 31, 2019 Allocation

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February Allocation:

Markets are choppy right now. They are not sure whether things are going to continue doing well or are going to decline. Trade wars, government shutdowns, airport chaos, Venezuela, and high level government official indictments are all part of the current news stream and people seem unsure how to deal with all the information.

My signals are saying to take risk off the table. The equity markets dropped a lot in December but they could drop by another 40% and still be within reasonable historic valuations.

This months trades will bring the debt exposure up to 17% in the active portfolios. That is one trade away from a neutral 25% (the same as in the equal weighted fund).

Updated Allocations:
  • Large Cap Equity (VONE):    83%  
  • Small Cap Equity (VTWO):     0%  
  • High Yield Debt (JNK):             0%   
  • Inv. Grade Debt (AGG):          17%  

Trades will take place on February 1st.

The Equal portfolio: The cash balance is under $1000 so we will not make any trades for this portfolio.

The TA portfolio: I will sell 1/11th of the VONE in the portfolio (853 shares / 11 = 78 shares to sell) and use that and the cash in the account to buy AGG. 

The Enhanced portfolio: The purchase I made one year ago was DBCMX (a commodity fund). I will sell half of that (844.47 shares) and buy GOVT with the proceeds and cash that has accumulated in the account. GOVT is similar to AGG in that they both invest in investment grade debt. The AGG holds US Treasuries, corporate debt and mortgage backed debt. GOVT only holds US Treasuries. If things continue to deteriorate GOVT should hold up better.

Disclaimer:
Past performance is not a guarantee of future performance.  This strategy is presented for informational purposes only and is not a solicitation to buy or sell any securities. I own all of the securities suggested in all three portfolio's.  October is one of the peculiarly dangerous months to speculate in stocks in.  The others are July, January, September, April, November, May , March, June, December, August and February. ~ Mark Twain

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