SMA Portfolio Rebalancing Planned

By on March 27, 2013

A review of the Stock Market Advantage portfolio revealed the allocation of assets has shifted from the targeted allocation of 70% fixed income and 30% equities. The SMA portfolio is now approximately 33% equities, 64% fixed income, and 3% cash due to the relentless advance of the stock market.

Over the next several weeks an attempt will be made to reduce the equity position through judicious sales of equity assets. I will signal these orders in advance, or arbitrarily sell on market strength. Any changes to the SMA portfolio will be revealed in blog posts. The first position sold will be the the ETF SPDR Dow Jones International Real Estate (RWX). A complete liquidation of RWX is planned before the end of the week.

The proceeds of the equity sales will be held in cash until a suitable fixed income alternative is identified.

The stock market has been floundering in its attempt to break through the S&P 500’s old high. I anticipate it will breach the old peak of 1,565 before the middle of April, after which a vicious selloff will ensue as the “sell in May” theme takes hold and other negatives dampen the bullish confidence of the investing public.

Below is a recent look at the SMA Portfolio:

Stock Market Advantage Portfolio

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