Netherlands Church
Bethe is a portfolio in transition from an income oriented emphasis to the Sector BPI Plus investing model. Bethe currently holds three Closed-End-Funds and limit orders are in place to sell those holdings. When this happens the Kipling spreadsheet will be used for guidance as to which, if any, equities to purchase. The Sector BPI model is what is used to select any of the eleven sector ETFs. Tomorrow I will post the most recent Bullish Percent Indicator data.
Just an added note. If you have TD Ameritrade accounts, they are to be transferred to Schwab this weekend. Check your statements next Tuesday to make sure all are moved properly.
Bethe Investment Quiver and Holdings
As the Bethe now stands it holds two sector ETFs (VDE and VOX), three CEFs and four U.S. Equities. Excess cash is held in the money market and BIL.
Bethe Security Recommendations
With the Kipling variables set to Buy-Hold-Sell (BHS) and the “default” look-back combination selected, no U.S. Equities are recommended for purchase. Since no BPI are oversold the recommendation is to hold all cash in SHV or just leave it in the money market. Since the current cash holding is less than $1,000 I plan to do nothing and leave the cash in the money market.
Bethe Manual Risk Adjustments
The risk management model recommends placing TSLOs on BIL, VTI, SPY, VOO, and ESGV and when sold, purchase shares of SHV. I’ll likely use a 2% TSLO for BIL and 8% TSLOs for the four equity ETFs. I am not in a hurry to sell U.S. Equities as I expect November and December to be rather strong end-of-year months for equities.
Bethe Performance Data
Over the past 19 months the Bethe is managing to hold a slight lead over SPY, the benchmark for this portfolio. The delta is even larger for the other five potential benchmarks.
Bethe Risk Ratios
The positive Information Ratio tells us the portfolio is outperforming the benchmark. While one might expect to see a positive Jensen Alpha, the risk we are taking with the current investments turns out to be negative. Higher interest rates for the risk-free U.S. Treasury (SHV) is placing downward pressure on the Jensen and that partially accounts for the negative value.
It will likely be several months before we see a positive Jensen slope for the Bethe.
Look for the latest Bullish Percent Indicator (BPI) data tomorrow.
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