Strictly ETFs or without any individual stocks, the following table lays out the latest recommendations based on the Tranche Momentum Model. The last ETF or QQQ is not always part of this list, but I include it here as it gives a broad view of how well technology is performing. Even though QQQ is under-performing SHY, note its high Absolute Acceleration Percentage (AAP)
Baker’s Dozen Recommendations: While the Baker’s Dozen is not one of the real portfolios managed and tracked here at ITA, I frequently use it as a general guide as to how well the primary ETFs are performing on an absolute and relative basis. Absolute Momentum measurements show every ETF outperforming SHY with exception of QQQ. Relative Momentum measurements place International Real Estate (RWX) and Gold (GLD) in the number one and two positions respectively followed by VWO in third position. U.S. REITs (VNQ) in the number four position fill out the tranche recommendations.
Position Sizing Recommendations: If this were a real portfolio, I would invest 100 shares in VWO, 200 shares in VNQ, 100 shares in GLD, and 400 shares in RWX. The “current” portfolio has an overall risk nearly identical to the suggested portfolio.
To see what a similar portfolio looked like a year and a half ago,.
Manual Risk Adjustments: Following my recommendations from above, this is what the portfolio and associated risks would look like. About 50% of the portfolio is in cash and the overall risk is well below 5%. This is a conservative portfolio and that fits fine with a market that is over-priced.