Sunday, July 2, 2017

Current state of the model list


The model list has been underperforming the S&P500 index for a few weeks. The model list normally outperforms the S&P500 but there are periods when it also underperforms. The stocks in the model list are currently extended but since the list changes every week, it will start to pick up stocks which will outperform the S&P500 as the stock sectors rotate. It is not a good idea to go to cash during these periods of underperformance of the model list. The reason being that we (portfolio) could get whipsawed. The time to go into cash or short term bonds is when the Tactical signal indicates so. This signal is shown on the lift side under “Market Trend”.