Street Paving on South Ivy Street
Five sectors are still positioned in the oversold zone when I checked early this morning. I’ll identify these sectors later on in the rebalancing section. The Carson currently holds at least one share in 10 of the 11 sectors. The hope is that a few of these sectors will move up faster than the broad equities market, thus gaining ground on the SPY benchmark. So far this year, this has not been the case.
Carson Sector Holdings
Below are the current holdings for the Carson portfolio. When the market is as volatile as it has been over the last few weeks prices move around sufficiently to throw the percent of portfolio out of whack with the recommended percentage. When there is sufficient cash and the sector is still in the oversold zone we can accomplish some rebalancing. That is the plan this morning.
Carson Rebalancing Recommendations
When I checked early this morning here are the sectors still oversold.
- Discretionary (VCR)
- Health (VHT)
- Industrial (VIS)
- Technology (VGT)
- Communications (VOX)
Instead of purchasing at market I set limit orders anywhere from 5% to 15% below the current price. It is difficult to know how far this market will decline as Trump is threatening to remove FED Chair Powell and hold fast to his tariff war. Both decisions are inflicting pain to U.S. equities, bonds, and the dollar. Chaos and uncertainty make it difficult to manage money and the Carson is no different.
When the Carson next comes up for review, if cash is available I will set limit orders to purchase shares in sectors that are most under target. Right now that would be VOX or Communications.
Carson Performance Data
Since 12/31/2021 the Carson has managed to outperform the S&P 500 (SPY). While the current delta is quite high, it will be extremely difficult to maintain this lead as more cash is needed to fully populate oversold sectors and bring them up to the recommended percentage.
I could sell shares of VOO to raise cash, but prefer not to with prices this low.
Carson Risk Ratios
Over the past year the Carson has seen a steady decline in the Jensen Performance Index. The same is true for the Information Ratio, the second most important risk measurement. These two ratios in particular indicate the portfolio is not keeping pace with the SPY benchmark.
The negative slope of the Jensen is another signal of weakness with respect to the SPY benchmark.
Questions and comments are always welcome in the Comment section.
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Industrials and Communications are the two remaining sectors still oversold. (4/23/2025)
Futures are up this morning so these two may also move out of the oversold zone. I plan to leave the limit orders in place. Should prices decline sufficiently the sector ETFs may be purchased. No harm in leaving the limit orders in place. Obviously the market is itching for any good news.
Lowell