There is nowhere to hide or make money investing at the moment as US equities saw another 4.6% loss on the week:
As I suggested last week we are now testing the lows of the year that were established in June. We are at the bottom of the downtrend channel so the big question is whether the June lows will offer support and we get at least a temporary bounce from here – or whether panic will set in and we see a more serious collapse.
However, US equities were not the worst performing asset class this week as, once again, none of the major asset classes generated positive gains – hence my comment that there’s nowhere to hide at the moment:
Real Estate was hit particularly hard.
Current holdings in the Rutherford portfolio look like this:
with ~70% in Cash after clearing all holdings in Tranches 3 and 4 over the past 2 weeks and minimum allocations in Tranches 1 and 2 in the prior 2 weeks. Thus, over the past month we have been gradually moving to Cash.
In terms of the impact on portfolio performance we see the following picture:
and, although we see a drop over the past month, it is far less that the drop seen in the value of the benchmark AOR fund. However, the significance of timing (review date) luck is emphasized by the difference between the best (Tranche 1) and worst (Tranche 5) performing Tranches. Tranche 5 is the focus of this week’s review so let’s check the ranking/recommendation sheets. First, for the BHS model:
There’s not much encouragement here with red everywhere and Sell recommendations for all ETFs.
Let’s take a look at the rotation graphs:
where the weakness is confirmed and we see no assets in the desirable top right quadrant.
Not surprisingly the rotation model also shows Sell recommendations across the board:
As in previous weeks I will follow the recommendations and move to Cash:
This will leave me about 90% in Cash for the total portfolio.