Despite the unrest in Ukraine, several of the asset classes we follow have tripped the buy signal. Even though equities have shown softness out of a perception of increased risk, they are still not showing a sell signal. Commodities, US Govt bonds, and real-estate, however, have shown strong growth since our last market check-in.
As a result of these changes, the Pro-Folio model remains invested in US and global stocks, and now indicates a buy situation for US Government bonds (IEF), global commodities (DJP) and US real estate (IYR).
The Pro-Folio model evaluates its holdings on a monthly basis. There are 3 trades this month. As of the last trading day of February (28th), we have the following trade signals:
- SPY – HOLD
- EFA – HOLD
- IYR – *** BUY *** PRICE 68.35, THRESHOLD 66.19 ***
- DJP – *** BUY *** PRICE 39.33, THRESHOLD 37.55 ***
- IEF – *** BUY *** PRICE 102.47, THRESHOLD 102.29 ***
For existing investors:
You should have spent the month of February invested in 2 of the 5 holdings above (sitting on the sidelines with cash for your IYR, DJP and IEF buckets). Now is the time to use 1/3 of your current cash holdings to buy IYR, DJP, and IEF. After the trades, you should be roughly equally invested in these 5 holdings.
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” or “BUY.” Because you didn’t invest in the “HOLD” 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.
We don’t know how the Ukraine scenario is going to play out, however, I think it is safe to say we will see additional variability in the European and US stock markets as a result. Fortunately for us, the Pro-Folio model has proven its worth over 41 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.
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.
Spring can’t come soon enough for many of my fabulous readers. I wish you a continued safe and happy 2014! Thank you for your interest in Pro-Folio!