Dirac 2026 Portfolio Review: 13 January 2026

Orchids, Botanic Gardens, Singapore

The goal of the Dirac Portfolio is to see if we might be able to beat the performance of the broad S&P 500 Index (as represented by the SPY ETF) by actively rotating between the sectors that make up that index. I started to build this portfolio last week with the objective of trying to keep the portfolio fully invested (100% allocation of available funds). However, rather than jump right in at this level I chose to be selective and not enter any positions that were based on a mean reversal (MR) entry at that time. Since opening the portfolio I have made a few adjustments and this post is simply to bring readers of the blog up-to-date rather than wait for a monthly review.

Last Friday (9 January) I added an extra 120 shares of XLB (Materials) to the portfolio and also opened a new position (343 shares) in XLE (Energy) when it triggered a Momentum Buy signal (positive momentum and acceleration):

This was followed by the addition of 81 shares in XLI (Industrials) when XLI also generated a Momentum Buy signal this morning (13 January). Note that I am now separating/identifying the Momentum Buy and Mean Reversion Buy signals in the analysis sheet:

I am not quite 100% invested at the moment (~$14,000 Cash):

but I’m getting close. XLU is still showing a Mean Reversion Buy Signal but the momentum/acceleration graphs are not looking particularly strong:

with momentum in negative territory and acceleration, although positive, also heading down/lower. I will look for a reversal in these signals before entering a position.

XLF is suggesting a Hold at this point, so is a little under allocated from equal weighting.

Despite not having been 100% invested, returns over the past week have managed to keep up with the benchmark SPY:

…. but, it’s early days ….