US stock market continues to inch ahead, anticipating slow growth (but growth) ahead. The Eurocrisis hit a milestone this week as an agreement was reached for the private Greek debt holders to take a 74% reduction in the value of their bonds. That is a big haircut, but much better for the markets than the massive uncertainty that has been hanging over the Greek situation for so long. In fact, just today I read an excellent, brief recounting of the months of tense negotiations on Reuters. Interesting stuff.
While these conditions are far
short of compellingly positive, they have been enough to trigger the buy
signal for World Stocks.
result of current conditions, Pro-Folio is now fully invested in its designated holdings. Here are the trade
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 – *** BUY *** – PRICE 54.66 THRESHOLD 53.96
IYR – HOLD
DJP – HOLD
IEF – HOLD
For existing investors:
Invest 20% of your total portfolio (in other words, ALL of your available cash) in the 1 holding of the Pro-Folio model
marked “BUY” as shown above. Afterward, you should have no part of your Pro-Folio portfolio remaining in cash or money market funds.
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. 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
US treasury bonds,
despite all the debate and worry about our debt ceiling and such, are
still considered the safest financial instrument in times of
uncertainty, as demonstrated by the recent increases in US bond prices.
The world’s investors continue to hold a large margin of safety in their portfolios.
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.