Portfolio Shield – July 2023

We are pleased to see the equity allocation continues to perform extremely well this year, particularly due to the recent outperformance of the Nasdaq-100 relative to the broad market.

Over the past two months, the long-term bond hedge in the equity allocation had a negative contribution to returns but it was more than offset by the outperformance of the Nasdaq-100.

Due to the outperformance of equities over the past month, Portfolio Shield™ no longer meets both criteria to remained hedged and is dropping its long-term bond hedge for July.

The new rotational model where the bond allocation can rotate between high-yield bonds and intermediate-term Treasury bonds each month when their one-month momentum screen is positive is working well.

Last month the strategy recommended rotating into short-term Treasury Bills last month as momentum for both high-yield and intermediate-term Treasury bonds was negative.

Given all the factors, Jeff and I continue to maintain that stocks can continue to rally, and bonds can rally in the months to come.

Portfolio Shield™ increased its position in SPY and QQQ and removed its position in TLT across all models for July.

Portfolio Shield™ is now positioned to take full advantage of a continued rally in stocks.

We continue to evaluate the options outlined in last month’s update for the equity allocation to move Portfolio Shield™ more toward a true monthly rotational momentum strategy.

The Growth, Balanced, Income, and Conservative models have added HYG and IEF and removed SHY to the bond allocation for July.

Portfolio Shield™ is now positioned to take full advantage of a rally in bonds.

As a reminder, all strategies are rebalanced on the first trading day of each month and at that time, any new monies are invested according to the model strategy you are in.

For those who want to change between strategies, changes will occur at the next rebalance.

Zero balance accounts that have had a zero balance for six months or more will be closed and where applicable, the advisory agreement terminated.

There is only a 0.3% allocation to cash in each model. Due to a misreporting between Morningstar® and the ETF providers, the Asset Allocation box on the fact sheets may show a higher cash position than is in the model.

If you have any questions or would like to change which Portfolio Shield™ strategy you are invested in, please let me know.

The latest Morningstar® Investment Detail Reports for the Portfolio Shield™ family are available on the Portfolio Shield™ website.

Thank you for your continued trust in allowing us to manage your money with Portfolio Shield™.

Thank you,

Steven Van Metre, CFP®