Well I’ve missed month end by a couple of days thanks to all the excitement about bin-Laden – fortunately there are no trades this month so I didn’t cause you to miss anything.
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. I don’t anticipate any trades in May, with the possible exception that it could be time to buy IEF. We’ll see on May 31!
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.
For the portion of your portfolio that is not following Pro-Folio, continue to keep an eye on the US equity markets. Nothing has changed in the last month, and I quote: “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.
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