Rutherford Portfolio Review (Tranche 3): 22 April 2022

Curious Robin looking for homebuilding materials

After looking like US equities were going to move higher at the beginning of the week we saw a sharp decline of ~4% over the last 2 days:

We have now broken out of the uptrend channel and are back tracking the D3-D downtrend line that I drew 2 weeks ago. The next major potential support line lies at ~420. From there we wait to see if this represents a triple (or 4-touch) bottom (~12.5% draw-down) and justifies a bounce or whether we see a decline and look for a potential 17% drawdown at ~400.

Performance of other asset classes over the past week:

shows that US Real Estate (VNQ) was the only asset class in positive territory.

It is not surprising that the Rutherford portfolio suffered a little despite the fact that shares of VNQ were added over the past 3 weeks:

Current holdings look like this:

with Tranche 3 (the focus of this weeks review) holding positions in VWO, DBC, GLD and the benchmark AOR fund.

Checking rankings and recommendations from the BHS model:

we see the same recommendations that we’ve see for the past few weeks with only DBC and GLD showing as recommended Holds. VNQ is still showing a little green in the EMA columns and in the HA short-term signals so let’s check the rotation graphs:

Here we see a short-term bounce in DBC and GLD and confirmed longer term strength in VNQ.

Recommendations from a rotation model offer the following suggestions:

i.e. to add positions in VNQ and VTI in addition to DBC and GLD.

With all the red across the board for VTI I am not encouraged to dive totally into US equities at this point – but I will sell my shares in VWO (red across the board) and continue my purchases (dollar-cost-averaging) of shares in VNQ. Although I am already heavily invested in DBC and GLD (>50% portfolio value) I will add to my current holdings in DBC by selling shares in AOR. This will still leave me with shares in AOR that partially complies with the suggestion to hold a position in equities.

The resulting holdings in Tranche 3 should then look something like this:

David