I’ve been reading a lot about the impact of the Brexit, and we have all been seeing it first hand most certainly. While stocks around the world dropped briefly, US indices (SPY) returned quickly to near their previous levels. The uncertainty has pushed US Real Estate (IYR), US Government Bonds (IEF), and our commodities basket (DJP) up quite a bit. We will keep an eye on the markets, but Pro-Folio USA signals no trades for July.
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 June (30th), we have the following trade signals:
For existing investors:
You should have spent the month of June 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 make NO changes.
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.
It will take a few months — perhaps even more than a year — for the markets to fully digest the upcoming departure of the UK from the European Union. We will keep to monitor all the markets.
As I said last month, “The US stock market remains overvalued” — I was surprised this week to see the indices jump back up so high after the Brexit vote. I take that as a sign of irrational optimism — buyers blindly assuming that the market will always go up, without evaluating fundamentals. The “smart money” is confident about an impending pullback, but even they don’t know exactly when it is going to occur. 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.
I will work hard on getting back to a timely schedule with my blog posts! Thank you for your interest in Pro-Folio USA!