After 5 weeks our “horses” are preparing for a possible change. At the end of week 5, 10_4 has moved back into the lead after running in last place for the past 2 weeks and last week’s leader (C_C4) has dropped back into 3rd position:
Looking at the best performing portfolio (10_4) we see that all 4 assets have positive returns with EPI (India) at the head of the list with a 6.98% Return:
Only 1 asset, EWS (Singapore), in all 4 portfolios (10_C4) does not have a positive return and this remains at exactly the same price as 5 weeks ago.
As a reminder, the following are the holdings in the 4 portfolios at the end of the 5 week period:
After a re-analysis/re-ranking of the ~100 assets in the Hawking asset lists, the following are the new recommended holdings for these 4 portfolios for the next 5 weeks:
FXI (3.61% return over the past 5 weeks) is the only ETF still ranking in the top 4, although the rankings still reflect a bias towards International markets. Note the slightly lower Beta of the C_C4 portfolio reflecting the wider diversification based on correlations. More details on the above rankings can be found in my recent Post on the Hawking Portfolio Review 5 September, 2014 ( https://itawealth.com/2014/09/06/hawking-portfolio-review-5-september-2014/ )
Holdings in the “Derby” will be adjusted to reflect the above recommendations based on prices at Monday’s market open.
David
David,
Are you making these changes to Hawking, or just virtually? If you are changing Hawking, I assume you are still using C_C4?
Thanks,
Steve
Steve,
The above changes have been made to the virtual accounts, but I have added 400 shares of EWW (Mexico) and 500 shares of AMLP to the “live” account.
David
David,
Thanks. I like to hear your purchasing and reasoning behind. Did you stay away from EWZ due to volatility?
Thanks
Steve
Steve,
I chose EWW primarily due to it’s higher overall ranking (that includes the lower volatility compared with EWZ). Also, EWZ appears to be in a pullback and might be a better choice in the $50-$51 range corrresponding to a 50-62% Fibonacci retracement from recent lows to high move. This is also the area of possible support at the 49 day EMA. The 400 share allocation was chosen since it is close to the Modified Risk Parity (MRP) calculation mentioned in my monthly Hawking Review post.
AMLP (~5.9% Yield) was chosen to boost the portfolio dividend returns together with existing holdings in PGX and PCY. Despite the fact that PGX and PCY do not show up at the top of the rankings, the 13/49 EMA “golden cross” signal is positive so there is no hurry to sell. However, stop loss orders (at recent lows $14.32 and $28.60 respectively) are still in place should prices pull back too far. Holding AMLP also gives me more diversification away from the strong International equity bias – hopefully minimizing volatility/risk.
David
David,
Thanks for your replies as always. EWW makes perfect sense and AMLPs yield is excellent! Do you know whether AMLP suffers from the taxation rules as MLPs do in retirement accounts?
David,
Speaking of yields, I added REM to one portfolio as it has a yield in excess of 13%. I’ll point out the purchase when the portfolio comes up for review. REM looked a bit like IDV some years ago when the yield was above 17%. In both cases I would not take on the risk if it were an individual stock, but as an ETF I can take a chance.
Lowell
Steve,
I’m afraid I don’t know the answer to your MLP taxation question since I’m in Canada and MLP’s are treated the same as stock or ETFs.
David