As the world steps across the threshold of a new year, global markets continue to struggle. The US dollar has strengthened in recent months and will strengthen more as US government interest rates ease upward. A strong dollar hits US exports because other countries cannot afford to buy as many US products. Many analysts are suggesting the end of the US bull market is at hand, broad commodities are showing no upward momentum of any kind, and US Real Estate has triggered a buy according to the model.
The Pro-Folio USA model evaluates its holdings on a monthly basis. There are 3 trades this month. As of the last trading day of December (31st), we have the following trade signals:
- SPY – *** SELL *** Threshold: 206.36 Price: 203.87
- EFA – AVOID
- IYR – *** BUY *** Threshold: 74.93 Price: 75.08
- DJP – AVOID
- IEF – *** SELL *** Threshold: 106.53 Price: 105.59
For existing investors:
You should have spent the month of December invested in the holdings above that are marked HOLD or SELL. You should have kept the cash equivalent of the positions marked AVOID or BUY, ready to invest when those segment signals turn positive. Now, you should sell your positions in SPY and IEF, and use 1/5 of your portfolio value to buy IYR.
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.
Since we have trades today, I wanted to be sure and get this out in time. I’ll post a follow-up discussion of 2015 performance in the next week or two.
Uncertainty abounds in the markets currently, with 4 of 5 segments of Pro-Folio USA keeping the cash on the sideline going into January. This situation gives us a unique opportunity rebalance our portfolio with ease, which we all should do at least once a year. That means, you should use exactly 1/5 of your portfolio to buy IYR today, and whenever Pro-Folio USA indicates the next purchase, you should use exactly 1/4 (25%) of your remaining cash balance to make that purchase.
The markets may be uncertain, but fortunately for us, the Pro-Folio USA model has never lost more than than 1% of portfolio value: that was 2008, the worst year in recent memory and the only year on record that Pro-Folio USA lost value. Keep in mind, the long term average growth of the model is north of 8% per year. We can continue to follow the model with confidence that our assets will be protected.
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.
Dear reader, I wish you health, joy and prosperity in 2016! Thank you for your interest in Pro-Folio USA — see you next year!