Majorca: Palma Cathedral La Seu
We end the month of January with a review of the Gauss, one of four Sector BPI portfolios. While there are currently four BPI sectors of the market positioned in the over-bought zone, the Gauss holds zero shares in any of these sectors. Technology was sold last week. The single remaining sector holding is VOX.
Gauss Sector BPI Recommendations
Below are the current holdings in the Gauss. This portfolio is in a state of transition from the Relative Strength model to the Sector BPI model and that accounts for the equity holdings. TSLOs are set for IQLT through VOE. Those equity ETFs will eventually be sold out of the Gauss and we will then be in full sector mode.
Gauss Performance Data
Over the last 13 months the Gauss is trailing the AOA benchmark by a small margin. Keep this in mind over the coming months as this is a good test to see how well the Sector BPI model works. The true test will start when all the equity holdings are out of the Gauss.
Gauss Risk Ratios
One of the reasons for shifting investing models is tied to the gradual decline in performance as readers can see in the following table. We hope to see a turnaround over the next six to nine months. The Gauss is going to be a real test of the Sector BPI model so keep an eye on this portfolio.
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Tomorrow I will post an update on the Carson, the original Sector BPI portfolio. When looking over the Performance Data for any of the ITA portfolios, keep in mind that 2022 was a less than stellar year for U.S. Equities or Equities in general. Don’t be surprised is 2023 is not a “flat” market with normal volatility. If this turns out to be the case, the Sector BPI Model should work quite well as it is an investing style that makes use of market volatility and reversion to the mean principles. Time will tell if this hypothesis will work.
Lowell