MARCH 2011 PRO-FOLIO TRADE INSTRUCTIONS

It is allergy season in Austin!

Well the US equity market sold off pretty heavily in the top half of the month, but then bounced back, regaining roughly 75-80% of the loss to date. 
Fundamentals haven’t changed – this market remains quite frothy, with commodity prices hanging as a dark shadow over economic growth, not to mention supply shocks from Japan and continued deleveraging around the world – which makes it tough for small companies to access the capital they need for growth, since banks keep lending criteria very tight during times of shrinking macro-economic debt. 
Overall we continue to see little change from the end of January as far as the Pro-Folio model is concerned. There are no trades this month.

SPY – HOLD OR BUY 
EFA – HOLD OR BUY 
IYR – HOLD OR BUY  
DJP – HOLD OR BUY  
IEF – AVOID  

For existing investors:
Keep 1/5 of your portfolio in cash. You should remain fully invested in the other 4 holdings of the Pro-Folio model as shown above. 

For new investors:
If you are new to Pro-Folio this month, you should divide your portfolio into 5 equal parts, and invest an equal amount of money in each of the securities shown above marked “HOLD OR BUY”. Because you didn’t invest in the components of the model at the time when the buy signals first turned positive, your returns on these initial trades may not be reflective of model’s typical expected returns. DO NOT invest in IEF right now. Stand by with that portion of your portfolio in cash, awaiting the buy signal.

Signing Off
For the portion of your portfolio that is not following Pro-Folio, continue to keep an eye on the US equity markets. Sure we had a little sell off in March which would normally make buying stocks more appealing, but now we’re right back up in nosebleed territory in terms of valuation, the S&P 500 earnings are near record highs, the economy is fragile, state governments and school districts across the country are cutting budgets. I hate to say it but the US stock market does not look like a tightly wound spring getting ready to launch. It looks more like someone high on cocaine waiting for the inevitable crash. 

If you want to get the PDF booklet showing you how to implement the Pro-Folio Original trading model on your own, click here.

If you want to learn more about the Pro-Folio PLUS upgrade portfolio, click here

Your Spring-Has-Sprung Publisher-

Matt Willson
Pro-Folio
www.pro-folio.net

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