Rutherford Portfolio Review (Tranche 4): 3 February 2023

Sunset at Ao Nang Beach, Krabi, Thailand – with Iconic Thai Longboat in reflections

US Equities had another strong week with the S&P 500 Index up close to 2% on the week and ~7.7% in the month from the closing price on 31 December 2022:

We have now taken out the prior December high at 4100 and closed above this level – so we could tentatively call a valid change in trend – although we hit a strong resistance point (61.8% extension) on Thursday and are presently sitting at the top of the new uptrend channel. We might expect to see at least a small correction in the coming weeks.

US markets also topped the best performing asset class list last week:

with equities, real estate and long-term bonds leading the list.

With the Rutherford portfolio not holding any of these assets:

performance lost out to the benchmark AOR Fund:

although still running slightly ahead since the rotation system was adopted for portfolio management.

Checking on the rotation graphs:

we see Developed equity markets (VEA) showing the strongest long-term relative strength (horizontal movement) although weakening in the shorter term (downward vertical movement) – as are many of the recent strong performing asset classes.

From the model recommendations:

we see Buy recommendations for VNQ and RWX with Hold recommendations for VEA and PCY.  Accordingly, this week’s adjustments will look something like this:

where I will use the Cash generated from the sale of 27 shares in GLD, together with available Cash, to add positions in VNQ and RWX (US and International Real Estate).

David