Colter
The McClintock is one of the latest portfolios to be move over to the Sector BPI investing model. This review shows readers how one might transition a portfolio from one investing model to another. The first order of business is to select the investment quiver. The first screenshot lays out the Sector BPI quiver.
McClintock Investment Quiver and Holdings
Below is the “standard” investment quiver I am using with the Sector BPI Plus portfolios. Each of the sector ETFs holds at least one share and the reason for this is that all 14 ETFs will have a starting point when there is sufficient historical data to produce a Portfolio Report.
McClintock Security Recommendations
This security worksheet recommends we not add any U.S. Equities. The McClintock currently holds 20 shares of VOO and I may need to sell some to fully populate all the sectors currently residing in the oversold zone.
McClintock Manual Risk Adjustments
In order to raise cash to populate the eight sectors currently in the oversold zone I need to sell 5 shares of VOO. See the 5th column from the right. In this same column one can see the required shares to be purchased in order to bring the percentages up to the recommended level. Remember that I am using the three-year volatility average to calculate what percentage to invest in each sector. This is the process or logic one uses to set up a Sector BPI portfolio.
After the market opens tomorrow limit orders will be set very close to the current price. I want the McClintock to be fully operational by the first of November.
McClintock Performance Data
After 22 months of data the McClintock is in a dead heat with the SPY benchmark. This is a good place to begin the “race” as both the benchmark and portfolio are on the same starting line.
McClintock Risk Ratios
The portfolio pulled ahead of the benchmark for the first time since last June. However, the margin is slight.
As more ETFs are added to the portfolio the beta increases. That increase plus higher short-term interest rates increase the portfolio risk and that is what we see with a negative Jensen.
One of the goals is to see a positive Jensen slope by this time next year.
The McClintock is a recent Sector BPI portfolio and therefore too new to have any data to produce a Portfolio Report.
McClintock Portfolio Review: 10 June 2022
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The sector buy recommendations is based on the latest BPI data. Eight sectors are currently oversold and they are: Materials, Discretionary, Staples, Health, Industrial, Technology, Real Estate, and Utilities.
Check the latest BPI post for ticker symbols.
Lowell
Since the market opened all securities are now filled with exception of VGT. A limit order is in place to add seven (7) more shares of VGT. The McClintock is set to operate using the Sector BPI investing model.
Lowell
Lowell,
I notice the sector maximums change regularly by a few 0.1’s except for VDE which is a large change. I’m a little surprised that a 3 year average changes that frequently but maybe it’s the round off. Also I see ESGV and VTI are at rank 5 while VOO is 4, so why are you selling VOO instead of the other two?
Bob W.
Bob,
The McClintock currently does not hold any share of either ESGV or VTI. I’m selling a few shares of VOO so cash is available to populate the oversold sector ETFs.
It remains to be seen if the oversold sector ETFs will rise faster than VOO. I’m betting that is the case, but the results may prove me wrong.
Yes, the 3-year volatility changes slightly every few days. I use the percentage from the first screenshot as a minimum guide. I generally purchase sufficient shares so the sector is a little above the “recommended” percentage.
Lowell