Kepler Sector BPI Portfolio Update: 13 November 2023

Japanese Garden

During the last two weeks in October I spent a significant amount of time repositioning and rebuilding portfolios into the Sector BPI investing model.  Kepler is one such example and I’m not quite there as Materials (VAW) is only half filled based on the recommendation visible in the first screenshot below.  Instead of picking up shares at market I use limit orders and there are still outstanding orders.

In addition to the limit orders to purchase more shares of VAW, I also placed Trailing Stop Loss Orders (TSLOs) under VTI and VOO to protect capital.  If congress does not approve funding of the U.S. Government this week, the stock market could take a hit.  While the TSLOs are in place to protect capital, cash is available in the Kepler to pick up shares of VOO at lower prices so this is a two edge sword.

Kepler Investment Quiver and Holdings

Below is the current investment quiver and holdings for the Kepler.  As you can see from this table, the recommended percentage for VAW is 9.0% and the Kepler is holding only 4.35%.  Several limit orders are in place to add more shares.  I expect one or two of these orders to be struck today.

Kepler Manual Risk Adjustments

Limit orders for 55 more shares are set for Materials (VAW).  This will leave over $30,000 in cash.

I anticipate the government will be funded in piece meal fashion, but this remains to be seen.  Holding this much cash is never the best idea.  However, the Kipling spreadsheet is recommending one remain in cash and wait for a better market before investing in either VTI or VOO.  Don’t be surprised if a “better market” ends up as a market with higher prices for U.S. Equities.

Kepler Performance Data

Over the past 22.4 months the Kepler continues to lag the SPY benchmark.  The portfolio is within striking distance of AOR, but it could be many months before it begins to come close to matching the S&P 500 (SPY).

Kepler Risk Ratios

Readers will want to watch the Jensen and Information Ratios to see if the Sector BPI investing model begins to make a difference.  Note that the conversion to the Sector BPI model only began on 11/1 so this is a very new portfolio to this sector investing style.

Here are past blog posts of two other investing approaches that I highly recommend if investors are interested in diversifying portfolio models.

Schrodinger Computer Manage Portfolio Update: 7 June 2023

Copernicus Buy & Hold Portfolio Review: 18 May 2023