The window to the right of the entrance was where I first started teaching mathematics.
As the oldest Sector BPI portfolio the Carson is the portfolio to watch if you are at all interested in this unique investing model. Before starting this blog entry I updated the Bullish Percent Indicator data for the different sectors and several are calling for a Sell as the BPI values are overbought. The sectors calling for a Sell are: Discretionary (VCR), Energy (VDE), Financial (VFH), Health (VHT), Industrial (VIS), Technology (VGT), and Real Estate (VNQ). While I use the Vanguard sector ETFs some of you may be using iShares ETFs. Results should be similar.
The Carson portfolio holds Energy and Financial sectors. The Trailing Stop Loss Orders (TSLOs) are already in place so no new moves on that front.
Carson Security Recommendations
Below is the current condition of the Carson. There is cash available and no sectors are recommended for purchase so we move to the highest ranked ETFs that are not sector ETFs.
Check the fourth column from the left. The highest ranked ETFs other than sector ETFs are: ESGV at #4, VOO at #5, VTI at #7, and SPY at #8. We will likely use all available cash before we need to look at any ETFs beyond SPY.
Carson Manual Risk Adjustments
To help us know how many shares to purchase of the recommended ETFs we use the Manual Risk Adjustments worksheet. Here are the recommendations.
- 48 shares are recommended for ESGV and the Carson already holds 10. Rounding to the nearest five shares, I set a limit order to pick up 40 more shares of ESGV.
- Next in order of rank is VOO. Ten (10) shares are recommended and the Carson already holds 15 so we move on to VTI.
- VTI is the next ETF to fill with remaining cash. Eighteen (18) shares are recommended but cash is limited so an order for 10 shares was placed. This leaves $611.32 in cash.
Carson Performance Data
June was an excellent month for the Carson with a return of over 6.0%. Over the past 18.6 months the annualized IRR is 10.9% while the SPY benchmark lost 1.6%. This data confirms the Sector BPI Plus model is working thus far. Before one becomes too confident of this model we need to endure another major bear market such as we experienced in 2022. This model only caught the tail end of that bear market.
Carson Risk Ratios
The follow risk data shows what happened to the Carson over the past 13 months. While the Carson has not experienced steady growth, the results are respectable. In two more months we will shed the extreme Treynor data which in turn will expand other graphs.
As mentioned in another blog the interest rate of the risk-free short-term treasury increased to over 3.0% so an increase in the Jensen Performance Index is significant.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
Tweaking Sector BPI Plus Model: 20 May 2023
Carson Portfolio Update: 18 November 2022
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