Model Allocation Changes: August 1, 2023


KEVIN’S COMMENTS:

The stock market has continued making great strides in the month of July.

 Nineteen out of the 61 categories that we follow outperformed the S&P 500. 

And only 7 of the 61 categories lost money in July. 

To view all of the categories, sorted by their 4 week return, CLICK HERE.

This made it hard to buy anything “on sale” in the month of July with the money going into your plan with each paycheck (Future Contributions).

I am starting to see a dramatic shift away from “Growth” style investing.  “Blend” and “Value” styles are starting to outperform as the S&P 500 loses momentum heading into the back end of July.

The Strategic models rebalanced last month (July) as they do every quarter. 

However, the Tactical models have changed since April 1st.

Until today!

BlackRock has made some dramatic changes to their models last week, which we monitor.

To read the rationale of the changes in the Asset Allocation, CLICK HERE.

There has been a shift from Intermediate and High Yield bonds to Inflation Protected and Ultra Short term bonds as it appears the Fed is hellbent on continuing to raise rates as inflation continues.

The Tactical Models also hit a “trigger” to start locking in some of the profits of the year and raise some cash.  (A stock market drop does you no good if you don’t have money to take advantage of what is “on sale”). 

The “trigger” could be a “false negative” and not last long if the market rally continues into August.

However, if it is not, it appears that there is a selloff coming soon.

The only question is how long and how deep will a selloff last?

Since no one can answer that question, we will let the charts guide us and we will respond accordingly.

Which is better than reacting accordingly if you are not prepared.


FUTURE CONTRIBUTIONS:

Equity Energy

Financial

Long Term Government Bond

 

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:

No changes.

(Last Rebalance was on Wednesday, July 5th)

 

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:

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.

Stay confident my friends!

-Kevin T Clark, RF

Kevin T Clark, RF™ is the CEO and Co-founder of Plan Confidence Corporation (PCC). Kevin is also an ERISA Nerd and one of only a hundred Dalbar certified Registered Fiduciaries (RF) in the United States. He has been helping hard working Americans invest their money for over 25 years!

PCC 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).

Kevin Clark