I’m pleased to share an update on recent market developments and the strategic positioning of your Portfolio Shield™ for December 2025.
Equities experienced a modest correction in November but recovered most losses by month-end. Despite signs of a gradually slowing economy and a softening labor market, Federal Reserve rate cuts continue to support strong risk appetite, with investors aggressively buying dips.
The next FOMC meeting is scheduled for mid-December. Recent commentary from Fed officials points to a likely pause in rate cuts, even as markets continue to price in a December reduction. Should labor-market conditions deteriorate further, however, the probability of a January cut would rise sharply.
History is a useful guide here: when the Fed cuts rates primarily in response to labor-market weakness rather than pre-emptively, the odds of recession and a subsequent bear market increase significantly.
Fixed-income markets were modestly weaker in November, with both high-yield and intermediate-term bonds posting small declines. Momentum in these sectors remains constructive, supporting their continued inclusion in the portfolio.
For December, your portfolio remains fully invested in the S&P 500 and Nasdaq-100, unchanged from last month. High-yield and intermediate-term bond allocations are also unchanged. A minimal cash position of 0.3% is maintained across all models.
Given the ongoing equity strength, Portfolio Shield™ will maintain its risk-on posture without hedging in the near term. Forward-looking indicators currently suggest the earliest hedging is likely in May 2026; however, we stand ready to act sooner if conditions warrant. For now, the robust performance of equities justifies full allocation.
I continue to enhance Portfolio Shield™ through ongoing AI development of the underlying trading program. A key upgrade this month: decisions to include or exclude high-yield and intermediate-term bonds are now driven exclusively by my Ultimate Meta Strategy, which requires multi-strategy consensus before any change is implemented.
The Ultimate Meta Strategy is currently optimized for 10-day forward returns but can be adjusted as market dynamics evolve. Going forward, its signals fully replace the previous momentum indicators from the original Momentum Timer Pro™ algorithm.
Additional refinements are in progress, including the development of a dedicated longer-horizon optimization engine that will better align entry and exit points with the strategy’s long-term investment objectives.
I will keep you informed as these enhancements are completed.
As a reminder, all Portfolio Shield™ models are rebalanced on the first trading day of each month, and new funds received are invested according to your selected model at that time. If you wish to adjust your strategy or risk level, please contact us before the next rebalance. Accounts with a zero balance for six consecutive months may be closed, and the associated advisory agreement terminated.
We remain fully committed to your financial success. Please don’t hesitate to reach out with questions, to discuss your Portfolio Shield™ strategy, or to inform us of any changes in your financial situation or objectives so we can continue providing the most suitable guidance.
Thank you for your continued trust. We are dedicated to managing your Portfolio Shield™ with discipline and care as we work together toward your long-term financial goals.
