Rutherford Portfolio Review (Tranche 2): 16 December 2022

Bird of Paradise – Auckland Botanical Gardens, New Zealand (with Artistic License from On1 Photo)

US equities continued to slide lower this week:

and price is firmly entrenched back in the downtrend channel that we have been in all of 2022. I can still envisage a retest of the 3600 level at least before we might see another technical reversal.

US equities were, in fact, the worst performing asset class this last week:

declining over 2% from last week’s close. Commodities (including Gold) and Bonds remained the strongest performing asset classes.

Tranche 2 of the Rutherford Portfolio is the first tranche to face a possible adjustment since the switch to the rotation system and holdings in the 5 tranches presently look like this:

with Tranche 2 holding positions in VTI, VEA, GLD and AOR.

Performance over the past 12 months looks like this:

i.e.  although losing money on the year the portfolio has performed better than the AOR benchmark Fund.

Let’s take a look at the rotations graphs:

where we see VEA, PCY and RWX firmly entrenched in the desirable top right quadrant of the chart.

Checking current rankings and recommendations:

we see that RWX is a recommended Buy with VEA, GLD and AOR as Hold candidates. Of the assets currently held in Tranche 2 only VTI is a recommended Sell – to be replaced by shares in RWX. This is therefore the action that will be taken next week:

At the same time I am also adjusting the fund allocations to each tranche (20% per tranche) so that we can follow the impact of review date (timing) luck when using this model.

David