Despite frothy valuations and much downside risk in the US stock markets, the Pro-Folio USA model is showing a buy signal for S&P 500 (SPY). While many analysts are suggesting the US equity ride is nearing its end, no one can accurately say whether it has a month or a year left to run. Staying on board with Pro-Folio USA buy/sell indicators will help you time that transition. Also, as I suspected might happen in last month’s note, US real estate (IYR) tipped back over to the buy side as well. Lastly in America, US government bonds (IEF) pushed ahead strongly, keeping the “hold” label for this month.
Around the world, equities (EFA) remain weak as developed nations struggle with high debt ratios dragging on their economic growth outlook. And, last but not least, commodities (DJP) remain down as China’s demand for materials stays sluggish.
The Pro-Folio USA model evaluates its holdings on a monthly basis. There are two (2) trades this month. As of the last trading day of March (31st), we have the following trade signals:
- SPY – *** BUY *** Price: 205.52 Threshold: 202.25
- EFA – AVOID
- IYR – *** BUY *** Price: 77.86 Threshold: 73.45
- DJP – AVOID
- IEF – HOLD
For existing investors:
You should have spent the month of March invested only 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 invest 20% of your total portfolio in each, SPY and IYR. Stated another way, since you are still holding a position in IEF, invest 25% of your CASH in SPY and 25% of your CASH in 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 one of those parts 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.
So …. I still owe you the 2015 performance analysis, but I have not forgotten – I will keep it top of list. I myself remain curious to see what the numbers look like. If any followers out there are willing to share your returns, go ahead and post a comment on this message! I would love to hear how you are doing.
The US stock market is like an icy cornice of snow high up on a mountain ridge, just waiting for a unwary skier or other stimulus to cause it to fall. No one knows when that stimulus will occur, 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.
Happy spring to all! For spring break from the kids’ school, my family and I paid a visit to Taos Ski Valley with some good friends. It was the kids’ first time to try snow skiing. I am thankful they had a blast and avoided injury. What a joy to watch them find a new passion! My wife and I also enjoyed the slopes for the first time in twenty-plus years. I wish each of you similar renewal and blessings this spring time! Thank you for your interest in Pro-Folio USA!