Rutherford Portfolio Review (Tranche 4): 1 March 2024

Palace Gardens, Bali, Indonesia

US Equities continued their bullish climb over the past week and are still heading towards the 5200 level where we might expect to see a little resistance:

In terms of relative strength VTI (representing US Equities) came in roughly the middle of the pack being outshone by Gold (GLD) and US Real Estate (VNQ):

Unfortunately I made a mistake in making my adjustments based on last week’s recommendations and inadvertently sold all my holdings in GLD, including shares held in Tranche 4 (the focus of this week’s review) as well as in Tranche 3 (that was the focus of last week’s review). As a result, current holdings in the Rutherford Portfolio look like this:

with excess cash in Tranche 4 as a result of selling out of my position in GLD.

Although I lost out a little by selling the shares in GLD, performance of the total portfolio stayed in line with that of the benchmark AOR Fund:

The above screenshot shows the performance of the Rutherford Portfolio since moving to the momentum-based rotation model ~10 months ago and, although not quite keeping up with the benchmark AOR Fund, it does show lower volatility (risk) and less sensitivity to review date (timing) luck than other models – so is a more defensive portfolio with benefits in terms of minimizing downside risk.

Checking the rotation graphs for this week’s recommendations:

we still see VTI in the desirable top right quadrant with a number of asset classes heading in the wrong direction towards the bottom left quadrant (weaker short and long-term momentum).

From the rotation model algorithm we see the following recommendations:

where, as in the last 2 reviews, the recommendation is to buy into global equities. Had I not sold my holdings in GLD last week I might be doing so now, although the recommendation would be to Hold (with a Score of 5).

Based on the above, my adjustments for this week (if I can manage to get it right) will look something like this:

where I will use the existing cash to Buy shares in VEA and VWO. Rather than worry about the minor adjustments to VTI and TIP I will simply apportion the (Cash) funds between the International Equity ETFs.