Carson Sector BPI Portfolio Update: 17 April 2024

Stratum: Zion National Park

Carson is the Sector BPI portfolio up for review this morning.  This is the oldest portfolio using this particular investing model.  There are a few tweaks this month.  One of the main changes is to remove ESGV from the holdings so we can concentrate on VTI and VOO when sectors are out of favor, as is currently the situation.

Carson Security Holdings

A few days ago shares of ESGV were sold out of the Carson leaving VTI and VOO holding non-sector shares.  Nearly 43% of the portfolio is held in cash requiring some decisions.  I look to the Manual Risk Adjustments for guidance, or the third screenshot.

Carson Manual Risk Adjustments

The following worksheet from the Kipling spreadsheet is recommending Holds for both VTI and VOO.  Rather than adding more shares at market I plan to place limit orders at 10% below the current price for both VTI and VOO.  There is a high probability these limit orders will be struck sometime this summer.

To protect capital I’ll also place 8.0% TSLOs under VTI (45 shares) and VOO (30 shares).  Should the market improve to where VTI and VOO switch to Buy recommendations I’ll add more shares at that time.  For now it is time to be patient.  Remember the old adage, “Sell in May and go play.”  Then get serious about investing after Halloween.  This is why I am not rushing in to put available cash to work immediately.  Yes, this is timing the market and market timing frequently fails.  Caution comes from three fronts.  1) We are entering the period when stocks tend to languish.  2) An election of historical proportions lies ahead.  3) The Federal Reserve seems less inclined to lower interest rates.

Carson Performance Data

Since 12/31/2021 the Carson has outperformed all six potential benchmarks.  The past few days we have seen some retracement in U.S. Equities, yet the Carson is still performing quite well.

Carson Risk Ratios

Only the Treynor improved since March and that is due to the lowering of the portfolio beta.  Holding this much cash lowers beta.  Of more importance is the decline in both the Jensen Performance Index and Information Ratio.  I doubt we will see much improvement in many of these risk ratios until after the November election.

Carson Sector Portfolio Report

The following portfolio report is published so readers can see how well the Sector BPI model is working.  ESGV will be removed from this data when the Carson is next updated.

Note that the performance since May of 2022 doubles the performance of the S&P 500.

The following link is added so readers can compare performance from March to April.  Rather than use absolute values, check the ratios.  To save you the trouble, the Carson/SPY ratio for March was 2.2, whereas the April Carson/SPY ratio is 2.26.  It is somewhat surprising the portfolio performed this well compared to the benchmark during a less than stellar period.

Carson Sector BPI Portfolio: 21 March 2024