Allocation Changes 10/2/2023
KEVIN’S COMMENTS:
What a difference one quarter makes!
Last quarter I was writing about the raging stock market and how 19 of 61 Morningstar categories that we follow outpaced the S&P 500.
This quarter we only had 13 out of 61 categories that have positive returns.
And only two that had returns above 3% (Equity Energy 14.88% and Commodities Broad Basket 7.80%).
So, the third quarter is starting to echo the returns of last year (which was a bad year).
Most of the losses for the quarter came from September, which has been the worst month of the year (so far).
Our Strategic Models are rebalancing today as it is the first trading day of the quarter.
(These models are always fully invested and rebalance four times per year).
Our Tactical models had a dramatic change back in August as 50% of all stock holdings were sold and moved to cash.
Currently the long(er) term indicators we monitor (50/200 day moving average and MACD) are extremely negative.
Our short(er) term indicators (VIX and RSI) are pointing to a short term “bump” in the markets over the next week or so as we approach a technically “oversold” market.
So, I am fully predicting that we will get a short-term bump next week with the oversold status, combined with the "window dressing” that
many Mutual Fund companies employ every quarter to dupe the public and mask their real holdings.
I also fully expect that the “bump” will not get us close to the ceiling of 4500 on the S&P 500 before another sell off occurs.
In fact, my bigger concern is what will happen after the “bump”.
If the S&P falls below 4200 (currently at 4289 as I write this), then we will most likely see the start of a bear market (down 20% or more) and wipe out the gains for the year.
4200 is the S&P 500’s two hundred day moving average and it is a highly technical spot on the charts.
FUTURE CONTRIBUTIONS:
Large Value
Long Term Government Bond
Small Growth
The exact amounts you should allocate depend on the model that you are using. These categories may or may not be available in your plan. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
REBALANCE - STRATEGIC MODELS:
Complete Rebalance today at 9am EST. Below are the new allocations for the fourth quarter and the percentage of changes from last quarter:
The exact amounts you should allocate depend on the model that you are using. These categories may or may not be available in your plan. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
REBALANCE – TACTICAL MODELS:
No changes. Last rebalance August 1, 2023
The exact amounts you should allocate depend on the model that you are using. These categories may or may not be available in your plan. Please log into your Participant Dashboard to see the exact allocations you should be using as of today.
This update has been written by Kevin T Clark, RF™.
All opinions expressed are those of the author and not that of Plan Confidence Corporation nor any other firm or individual.
Kevin T Clark, RF™ is the CEO and Co-founder of Plan Confidence Corporation.
Kevin is an ERISA Nerd and one of only a hundred(ish) Dalbar certified Registered Fiduciaries (RF™) in the United States.
He has been helping hard working Americans invest their money since 1997!
Plan Confidence Corporation is an SEC registered investment firm specializing in providing advice to hard-working Americans investing in their employer’s retirement plans (401k, 403b, TSP, etc).
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