Art Deco Lamp
As the original Sector BPI portfolio the Carson is scheduled for review this morning. As mentioned in an earlier post or comment, I have concerns when a portfolio is in the position of holding few securities while the potential for a bull market run lies ahead. Should a bull market ensue there are only two securities, VOX and VPU, to take advantage of a future rise and neither is likely to make a significant difference. VPU in particular carries one of the lowest volatility percentages. There are too few shares of either sector to make much of a difference. Is there a possible solution to this condition. I’m working on a few ideas.
Carson Sector ETF Recommendations
Last week there was a day or two when Communication Services (VOX) moved into the over-bought zone. Last Friday the sector was back in the neutral zone so I’ll not be placing a 3% TSLO on VOX. What to do with all the cash? Heretofore I would purchase shares of SHV or SCHP. That may change so read on.
Here is another option. If the Point and Figure (PnF) of VTI is bullish, purchase up to 50% of the total portfolio in this broad market ETF. This is to take advantage of a potential bull market should the portfolio not be holding sector equities.
Carson Performance Data
Over the past 13 months the Carson holds a four percentage point lead over the AOA benchmark and an even larger margin over the S&P 500 (SPY). In order not to fritter away this lead, I’m considering the option of investing in U.S. Equities (VTI) when there are no sector purchase recommendations.
Carson Risk Ratios
The decline in the Jensen Alpha or Jensen Performance Index is a primary reason for considering adding shares to VTI.
The Information Ratio is holding up rather well. This value is one to watch over the next six to nine months. Keep in mind that we are still very early in the Sector BPI experiment as we have yet to experience a complete Sell/Buy cycle. Several of these cycles are needed to arrive at any conclusions.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
New Carson Launched: 4 November 2022
Carson Portfolio: Creating A New Investing Model
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Lowell,
What I’ve been doing is making BPI a portion of existing portfolios and continue to use BHS, VTI and CEFs. I tend to divide each portfolio into 3rds with BPI being 1/3 and some combination of the other 3 being the remaining 2/3. I may simplify more but that’s what I’m doing for now..
Bob W
Bob W,
An interesting approach. I like your three pronged idea.
Lowell