MARCH 2012 PRO-FOLIO TRADE INSTRUCTIONS
OverviewIt pains me to have to begin by reporting an error. In the January trade instructions, I wrote that DJP (commodity index investment) had crossed the BUY threshold and should be bought. Somehow that was in error, and I sincerely apologize. In actuality, DJP remains below the 10-month moving average, and should not have been purchased. I suggest that anyone holding DJP should sell that investment as soon as possible. And again, I'm very sorry for the mistake.
Now that the Greek issue has been shelved for the time being, all eyes are on Spain as the next nation to face some kind of "negative credit event" relative to its government bonds. Spain's economy is much larger than Greece's, and by many counts, much worse off. It will be very interesting to see how the cards fall in Spain.
Despite the continuing gloom in Europe, investors remain weakly positive on most issues.
As a result of current conditions, Pro-Folio remains fully invested in its designated holdings. Here are the trade instructions:
The Pro-Folio model evaluates its holdings on a monthly basis. As of the last trading day of January (31st), we have the following trade signals:
SPY - HOLD
EFA - HOLD
IYR - HOLD
DJP - AVOID
IEF - HOLD
For existing investors:
As of today, 80% of your portfolio should be invested equally in the 4 positions above marked as "HOLD".
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 as "HOLD." Because you didn't invest in some of the components of the model at the time when the buy signal first turned positive, your return on these initial trades may not be reflective of the model's typical expected returns.
I'll keep my eyes open for news about Spain that is worth sharing with you. In other news, the U.S. unemployment numbers appear to be creeping downward, which is having a generally positive affect on our equity market.
Fortunately for us, the Pro-Folio model has proven its worth over 37 years including the 2008 market crash, so we can continue to follow it precisely and expect that the value of our holdings will be preserved.