Portfolio Shield – September 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.

Looking forward, the equity allocation is likely to remain unhedged for the next three months unless there is a major shift in the markets.

Last month the strategy recommended rotating into high-yield and intermediate-term Treasury bonds as momentum for both was positive. Intermediate-term Treasuries were down for the month while high yield bonds were unchanged from the prior month.

Momentum for both turned negative for the month, so both positions will be removed from the model for September.

Given all the factors, we continue to maintain that stocks can continue to rally as investors remain bullish on the economy. While we both believe bonds can rally in the months to come as inflation continues to cool, both the market and the Federal Reserve believe rates can go higher.

There were very slight changes to the Portfolio Shield™ equity allocation for September.

Portfolio Shield™ remains 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.

We are in the early stages of building a new model that could be used in a rotational equity model, which I am rather excited about.

The Growth, Balanced, Income, and Conservative models added a position in SHY and removed their positions in HYG and IEF in the bond allocation for September.

Portfolio Shield™ is now defensively positioned against rising interest rates.

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®