Portfolio Shield – June 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. 

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.

Shortly after the monthly rebalance in May, momentum across both bond funds rose and is now positive on a one-month basis as the market begun taking positions ahead of the first anticipated rate cut until later this year.

The market responded to this change in expectations by sending bond yields slightly lower in May.

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

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 positions in HYG and IEF and removed their position in SHY to the bond allocation for June.

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

Portfolio Shield™ is positioned to take advantage of falling 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®