I want to update you on recent market developments and the adjustments to your Portfolio Shield™ strategy for March.
Last month, stocks reached a new all-time high, mainly due to optimistic sentiment among retail investors and active buying during market dips. However, this enthusiasm was short-lived, as significant price declines occurred in the last week of the month.
Looking ahead, we plan to keep the equity allocation unhedged until May, anticipating a shift to risk-reduction mode when probabilities increase. Bond prices rallied in February, and the positive momentum continues for both high-yield bonds and intermediate-term Treasuries.
Our strategy remains bullish on bonds for March. The equity allocation remains unchanged as we aim to benefit from ongoing stock market rallies.
We are actively exploring the options discussed in last month’s update to refine the equity allocation and transition Portfolio Shield™ to a more dynamic monthly rotational momentum strategy. Our back-testing engine is now complete, allowing us to test various strategies to identify the most effective approaches based on historical performance. Our aim is to develop a fully rotational model that enables agile market positioning.
Significant improvements have been made to the momentum model for bond allocation. We anticipate these enhancements will lead to better decision-making, optimizing allocations during rising bond prices and swiftly adjusting to defensive positions when prices fall.
In March, we made no changes to the equity or bond allocations across any of the models.
Please note that all strategies will be rebalanced on the first trading day of each month. Any new funds will be invested according to your selected model at that time. If you wish to change your investment strategy, changes will be implemented at the next rebalance. Accounts with a zero balance for six months or more will be closed, and, where applicable, advisory agreements terminated.
Currently, we maintain a minimal cash allocation of just 0.3% across all models.
If you have any questions or would like to discuss your Portfolio Shield™ strategy further, please feel free to reach out.
Thank you for your continued trust in us to manage your investments with Portfolio Shield™.
Best regards,
Steven Van Metre
