Rutherford Portfolio Review (Tranche 1): 17 November 2023

Horseshoe Falls, Niagara Falls, Canada

After Tuesday’s strong breakout to the upside, US Equities calmed down into consolidation mode but ended the week up ~2.5% from last week’s close:

I think we can say that we have broken out of the downtrend channel that we have experienced over the past 3 months and may be gearing up for Santa’s rally into the end of the year.  However, the new channel looks a little steep right now so we might experience a pullback to re-test the support/resistance area at ~4400 before we see if we can take out the July high at ~4610 before the end of the year.

Despite the strong performance of global equity markets over the past week this was outdone by strength in the Real Estate sector:

Unfortunately, the Rutherford portfolio is not holding positions in either equities or Real Estate:

so we missed out on Tuesday’s strong burst to the upside:

and have fallen below the performance (in terms of total returns) of the benchmark AOR Fund. However, in risk-adjusted terms, for a conservative investor, performance is acceptable since we saw less volatility (and smaller losses) during the downturn.

Checking the current rotation graphs:

we still see little action in the desirable top right quadrant although the rotation algorithm is giving us the following recommendations:

with Buy recommendations for adding shares of PCY, and VTI in addition to our volatility class diversifier SVXY and a Sell recommendation for DBC (Commodities) that is currently held in Tranche 1 (the focus of this weeks review). This leaves us with the following potential adjustments:

i.e. I will be selling the current position in DBC and adding shares of PCY and VTI. This will require the sale of a few shares of BIL to free up sufficient cash for the purchases but will still leave me with a relatively high percentage (57%) in short term treasury notes.