I’m very tardy on trade instructions, but only because there are no trades this month. Steady as she goes. The ECB (European Central Bank) announced a huge liquidity program, intending to pump as much as a trillion euros into the European economy in an attempt to stimulate growth. The ECB is still buying unlimited quantities of Spanish and Italian government bonds in order to prop up those bonds as the respective governments teeter on the brink of insolvency. Continued unrest in the Middle East and Ukraine is keeping pressure on the European bourses (stock markets).
The Pro-Folio USA model evaluates its holdings on a monthly basis. There are no trades this month. As of the last trading day of August (29th), we have the following trade signals:
For existing investors:
You should have spent the month of July invested in the holdings above that are marked HOLD or BUY. You should be keeping the cash equivalent of the other 2 positions on the sideline, ready to invest when those segment signals turn positive.
For new investors:
If you are new to Pro-Folio USA 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.
In coming weeks, the geopolitical issues going on in the Middle East and Europe will continue to distract the world’s attention away from the major fiscal and monetary issues continuing to unravel in Europe. The end for Spanish and Italian bonds isn’t going to be pretty.
Fortunately for us, the Pro-Folio USA model lost less than 1% of value in 2008, the only year on record that it lost value. We can continue to follow the model with confidence that our assets will be protected. Sleep well every night!
If you want to get the PDF booklet showing you how to implement the Pro-Folio USA trading model on your own, click here.
If you want to learn more about the Pro-Folio Global upgrade portfolio, click here.
Those of you with children heading back to school, I wish you all success in academics, athletics, and other extracurricular activities! Stay tuned for next month’s newsletter. If I can ever squeeze in some extra writing time, I’m working on a glossary of investment terms that ought be helpful to most beginning and intermediate investors. Thank you for your interest in Pro-Folio.