Rutherford Portfolio Review (Tranche 2): 11 March 2022

Opera House, Sydney Harbor, Australia

US Equities maintained their high volatility over the last week – primarily as a result of Russia’s invasion of Ukraine – and closed the week ~3% lower than last week’s close:

The downward channel, as defined by the recent highest highs (heavy aqua line) and lowest lows (heavy red line), is narrowing and it looks as though the possibility of completing a Gartley pattern to the upside (D3) is missed and the possibility of completing an ABCD pattern to the downside is more likely.

The performance of other asset classes was very different from recent performance:

with international bonds showing the highest gains followed by Gold and international real estate. All other asset classes (including commodities) showed losses.

The impact of this on the performance of the Rutherford portfolio is shown below:

where we see, despite losses in the last week, the benefit of including asset classes such as Gold (GLD) and Commodities (DBC) in our portfolios. Over the past month, the Rutherford portfolio (heavy red line) has significantly outperformed the benchmark AOR Fund (heavy dark blue line) with even the poorest performing tranche, Tranche 2 (the focus of this week’s review), catching up to the benchmark and compensating for the opportunities missed resulting from the use of TSLOs in 2021.

Current holdings in the portfolio look like this:

Checking on current rankings and recommendations from the BHS model:

we see that GLD and DBC remain the two recommended Buys.

For a clearer picture we can take a look at the rotation graphs:

where we see a confirmation of this strong relative strength in these assets (sloping up and to the right with long tails).

Recommendations from a rotation model:

suggest the same holdings.

With ~$4,500 in Cash I need to decide whether to continue to hold in Cash or to add shares of existing or new funds. With a small holding in VNQ and positive HA signals I will choose to hold on to these shares and I will use the available cash to add shares of TIP that, while not a recommended Buy is only lacking a positive signal from the short-term HA3 indicator to “flip the switch”. My adjusted positions (in Tranche 2) should therefore look something like this:

David