Dirac 2026 Portfolio Review: 27 February, 2026

Bacon-wrapped Jumbo Shrimp at Beachfront Restaurant , Nuevo Vallarta, Mexico. Note Size relative to Grapefruit Decoration!

The objective of the Dirac Portfolio is to outperform the S&P 500 stocks, as represented by the SPY ETF, by rotating between sectors that make up the S&P 500 Index.

Current analysis of the component sectors looks like this:

with Buy or Hold recommendations for all but XLC (Communications), XLF (Financials), XLK (Technology) and XLY (Consumer Discretionary). Of these, the only ETF that I am currently holding is XLC, since, despite the recommended Sell recommendation over the past ~2 weeks, XLC has not dropped below the previous day’s lows and is now looking like both momentum and acceleration may be increasing:

However, since my strategy is to remain close to being fully invested and am presently under-allocated in most sectors, I want to try to bring this back into balance without over-trading. Based on the recommendations to hold 6 ETFs this would mean a ~$14,300 investment in each ETF. As a step in the direction to achieve this balance I have therefore added additional shares in XLU (Utilities) and XLV (Healthcare) based on more favorable looking momentum/acceleration graphs:

This leaves the portfolio now looking like this:

with ~$9,000 in BIL (proxy for Cash) and continuing to hold XLC.

Recommended allocations look like this:

so there is still a little adjustment required to meet all recommendations. However, performance to date, after 2 months, looks like this:

clearly (and a little surprisingly – to me, at least) outperforming the benchmark SPY fund that is, in fact, showing a small negative return over this period. The out-performance is significantly greater than I had anticipated – 52% Internal Rate of Return (IRR) over this period with a very comfortable 7.9% volatility. My only explanation of why we are seeing this performance may be due to the equal weighting allocation that I am using to populate the portfolio. These sectors in the S&P 500 are not equally weighted with Technology being the dominant sector in terms of weighting and, consequentially, performance.