Analog gauges used to monitor the eight engines on the Spruce Goose.
Next week is going to be a heavy week for portfolio reviews. See the middle bottom footer. To gain a head start I’ll begin with an update of the Franklin as little action is required. ITA readers will recall that the Franklin began as a Dual Momentum™ portfolio, but with mixed performance results. The goal for the Franklin is to improve the Return/Risk ratio. A positive turn seems to be in the making as you will see later in this review.
Franklin Security Recommendations
Earlier this morning you read that the Bullish Percent Indicator data found the Industrial sector to be overbought. The Franklin holds eleven (11) shares of VIS or the ETF that covers the Industrial sector. A Trailing Stop Loss Order (TSLO) was set to sell VIS should it retrace 2%.
No sectors are oversold so there are no Buy recommendations. Note that VTI is recommended for purchase as is VWO. These ETFs are from the Dual Momentum model. Since VTI ranks higher than VWO we use excess cash to pick up shares of VTI.
Franklin Manual Risk Adjustments
The Franklin manual risk adjustments worksheet provides guidance as to how to manage the Franklin. As mentioned above Industrial is a sell so I have a TSLO set to sell VIS, the ETF that covers this sector. If VIS is sold out of the Franklin that cash will be invested in VTI. VTI ranks higher than VWO so it is next in line for purchase.
As a review, the Franklin is populated in this order.
- First, fill all recommended sectors. Since no sectors are currently recommended for purchase we move to #2.
- The second level of population comes from four possible DM ETFs. They are: VTI, VEA, VWO, or BND. We invest in only one at a time. VTI is ranked #1 so we fill it after all sector recommendations have been filled.
- Should there be excess cash we move down to the Closed-End-Funds (CEFs).
Franklin Performance Data
After nearly 18 months of data the Franklin is edging out the S&P 500 by a very small margin. It will not be easy to maintain this lead.
Franklin Risk Ratios
Check out the Jensen Alpha row of data. The last few months are positive, but slowing in growth. Nevertheless, the slope of the Jensen is positive. The Sector BPI Plus investing model appears to be holding its own.
Tweaking Sector BPI Plus Model: 20 May 2023
Questions and Comments are always welcome. Post them in the Comment section provided below.
Reminder: The ITA Wealth Management blog is now free to all who register as a Guest. Lifetime members no longer need to pay $5.00/month to gain access to the blog posts.
Discover more from ITA Wealth Management
Subscribe to get the latest posts sent to your email.
I should have stated clearly that I will not sell VIS immediately and purchase shares of VTI. VIS will not be sold until the TSLO percentage is struck. If VTI is still recommended for purchase at that time the cash from the sale of VIS will be used to purchase shares of VTI. The sale of VIS could be months away so other recommendations are likely to change.
Lowell