Portfolio Shield – April 2024

We are pleased to see the equity allocation continues to perform well this year, particularly due to the continued strong performance of the S&P 500 and Nasdaq-100.  We are also pleased that the bond allocation continues to perform well since implementing the new momentum-based formula for the bond allocation.

The Federal Open Market Committee continues to indicate that as long as inflation continues towards their two-percent target they will likely cut rates several times later this year which could be a catalyst for both higher equity and bond prices.

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

Given all the factors, we continue to maintain that stocks can continue to rally as investors remain bullish on the economy, corporate share buybacks continue at a large pace, and investors believe Federal Reserve rate cuts are bullish for equity prices.

We believe bonds can rally in the months to come as growth and inflation expectations continue to slow, and that the Federal Reserve is likely to lower rates later this year.

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

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 reduced their position in HYG to add a position in IEF to the bond allocation for April.

Based on the current one-month momentum screen applied to the bond allocation, the momentum for both HYG and IEF was positive last month.

The addition of IEF to the bond allocation will likely add some additional volatility over the short term.

Portfolio Shield™ is positioned to take full advantage of a decline in 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.

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

Thank you,

Steven Van Metre, CFP®