Cool Charts Explained:  Market Returns:

The markets started to turn around in the last week of April and then continued their momentum until the last week of May. 

As you can see by the numbers above, the stock and bond proxies we follow were up substantially in the past four weeks.

This shows that money was coming off the sidelines and out of “cash” for the past month. 

Could this be the start of a summer “rally”?

Or could this be opportunistic investors who were “buying the dip” from April?

Only time will be able to answer these questions. 

However, the last week of May was not good for the stock market and there was a good “up” day on Friday, the last day of the month. 

However, this move is not to be trusted as there is always “window dressing” that occurs at the end of the month.

(“Window dressing” is when mutual fund companies buy or sell specific investments right before they “disclose” their holdings to the public.  This causes artificial moves in the markets at the end of any given month).

So, again, time will tell if all the markets will continue to rise like they did in the month of May, or if the last week of the month is a precursor to what we will see in June.

So, stay tuned as we get the answers to these questions next month!

When I look at the chart above one thing is certain, the market for the past three months has had absolutely no direction. 

March saw the changing of the guard from “Growth” style of investing to “Value”.

Then, April saw sell offs in all styles of investing, only to go favoring the “Core” and “Growth” style of investing in May.

So, there is no solid direction for the markets right now.

This is very common in the year of a presidential election. 

The market tends to have a lot of volatility during an election year.

And this year appears to be no different.

For now, we will have to deal with a directionless market that is full of fits and starts.

The volatility is here to stay, for now!

Cool Charts Explained:  S&P 500 Chart:

So, this is a new chart for you this month.

However, I look at this chart every day the stock markets are open.

This is a chart of the S&P 500 and several data points.  Specifically, it shows the following:

·       RSI – Relative Strength Indicator (shows when the market is “over bought” or “over sold”)

·       50 / 200 Day Moving Average – (this shows where the market currently is based off of the past 50 and 200 days average)

·       MACD – Moving Average Convergence/Divergence  - (this shows the current “momentum” of the market)

Taken together, all three of these indicators are very powerful in trying to understand the direction of the current market.  All three of these indicators have “buy signals” and “sell signals”. 

And the MACD has just posted a “sell” signal (see chart above).  When the red line crosses over the black line, it shows that the momentum is trending “down”.  The farther the two lines separate, the larger the selloff is.

PLAN CONFIDENCE MODEL UPDATES:

FUTURE CONTRIBUTIONS:

Future contributions are money that is added to your plan with every paycheck. 

We monitor the future contributions monthly and are looking to direct these monies into investments that should be “on sale”. 

This would allow you to buy more shares in your portfolio. 

This month we are advising that you use the following:

·      Large Growth

·      Long Government

·      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.  If they are not available in your plan, we will recommend the closest available asset class.  You can find all substitutions on your “Proxy Page” within your dashboard.  Please log into your Participant Dashboard to see the exact allocations you should be using as of today.

CURRENT ALLOCATIONS  - STRATEGIC MODELS:

Our “Strategic Models” combine the benefits of asset allocation and “buy and hold” strategies.  These models rebalance quarterly back to their risk “targets” and remain fully invested through all market cycles. 

Our Strategic Models rebalance the first trading day of every quarter.

There are currently no changes

The last update was on April 1, 2024

The exact amounts you should allocate depend on the model that you are using.  The categories we use 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.

CURRENT ALLOCATIONS  - TACTICAL MODELS:

Current Allocations are the monies currently in your plan.  Making changes to this money is known as a “rebalance”.  Some plans have trading restrictions on how often you can rebalance the money in your plan. 

Be sure to know your plan’s restrictions before implementing any strategies.

There are currently no changes

The last update was on April 19, 2024

Our “Tactical Models” combine the benefits of asset allocation and “momentum investing” strategies.  These models rebalance periodically back to their risk “targets” and the targets can be changed at any time given the current market conditions.  These models may go through periods of time while holding larger amounts of cash than the Strategic Models.

Our Tactical Models may rebalance on any given day.  Please be sure to look for an email from support@planconfidence.com letting you know when to make changes.  Also, be sure to keep our “push” notifications “on” if using our app.

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.

Model Portfolio Rationale:

Plan Confidence relies on the research and model construction from BlackRock, Inc. (the largest asset manager in the world). 

We use their “Target Allocation ETF Multi-Manager” model and “deconstruct” their allocations back to the asset categories to program the Plan Confidence™ Software. 

We then map those categories as closely as we can to the available investment options that you have in your plan.

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).  They have created proprietary software so hard-working Americans can receive professional, ongoing advice on their employer’s retirement plan from an adviser of their choosing!

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