I’m pleased to share an update on recent market developments and the strategic adjustments to your Portfolio Shield for September 2025. Last month, the strategy performed exceptionally well, driven by strong gains in equities and high-yield bonds.
Despite a gradually slowing economy, several factors support a positive outlook for equities. Corporate earnings exceeded expectations this quarter, the trade war is coming to an end, and Trump’s tax bill has been enacted, fostering market optimism. However, risks remain.
The Nonfarm Payroll report, due Friday, is expected to show further labor market weakening, and the QCEW revisions next week may reveal the Bureau of Labor Statistics overstated payrolls by hundreds of thousands of jobs.
While investors anticipate a Federal Reserve rate cut later this month, its impact on equities may be limited. Historically, stocks rally for three months following rate cuts, but a weakening labor market could signal the start of a bear market.
High-yield bonds delivered strong returns last month, enhancing the bond allocation. Momentum for intermediate-term bonds turned positive, leading to their inclusion in the September bond allocation.
For September, your portfolio remains fully invested in the S&P 500 and Nasdaq-100, consistent with last month. The high-yield bond allocation has been reduced to 57 percent, with the remainder in intermediate-term Treasuries. A minimal cash allocation of 0.3 percent is maintained across all models.
Given current market strength, the strategy will maintain its risk-on stance without hedging in the near term. We are prepared to adapt if market conditions shift, but strong equity performance supports full allocation for now.
In previous updates, I mentioned engaging a programmer to develop a custom rotational strategy. While those efforts did not meet expectations, I’m excited to share a promising development. Advances in artificial intelligence have enabled me to create sophisticated programs without extensive coding expertise. I’ve begun building a swing trading program that integrates diverse strategies, supported by a custom backtesting platform. The early results are highly encouraging.
By leveraging AI, I’m working toward adapting the Portfolio Shield™ algorithms to optimize the strategy through real-world backtesting simulations. While this process is ongoing, the technology now available positions us to achieve these enhancements efficiently. I’m eager to share further progress on this initiative and its potential to refine your investment strategy.
Please note that all strategies are rebalanced on the first trading day of each month, with new funds invested according to your selected model at that time. To adjust your investment strategy, please notify us before the next rebalance. Accounts with a zero balance for six months or longer may be closed, and any applicable advisory agreements terminated.
We remain dedicated to your financial success. If you have questions or wish to discuss your Portfolio Shield™ strategy further, please don’t hesitate to reach out. Additionally, please inform us of any changes to your financial circumstances so we can tailor our recommendations to your needs. Accurate and complete information ensures we provide the most effective investment guidance.
Thank you for entrusting us with your investments. We are committed to managing your Portfolio Shield™ with precision and care to help you achieve your financial aspirations.
Best regards,
Steven Van Metre
