Weekly Market Update 4/4/10

Most of the markets finished up just shy of 1% for the week. Not
much else has changed. I think the upside from her is limited and
risk of entry from this point is to great.

Weekly Market Update 4/11/10

The markets have continued to rise and more sentiment indicators are
reaching extremes. Long entries at this point carry additional risk.
That being said, Barron’s Quarterly mutual fund report is out this
week. So, if you plan on following the Quarterly ETF Strategy, Monday
will be the day to place your trades. Based on the system I sent to
you in the Quarterly ETF Strategy email here is the allocations for
this quarter:

Quarterly ETF Strategy Allocation

25% IJT-iShares S&P Small Cap 600 Growth
25% IJS-iShares S&P Small Cap 600 Value
25%. EWJ-iShares MSCI Japan Index
25% SCZ-iShares MSCI EAFE Small Cap

I am allocating 25% of my total portfolio to this strategy so I will
be putting 1/16 of my total portfolio into each of the four ETF’s
listed above. By the way, as of Fridays close, this strategy was up
5.11% for the first quarter.

Weekly Market Update 4/18/10

The markets finally took a 1% hit on Friday when the SEC brought
fraud charges against Goldman Sachs. I would like to see some of the
Wall Street firms pay for bringing our economy to the brink of
financial disaster. Usually when they make a mistake the damage is
limited. This time they almost brought down the entire system. That
being said it doesn’t sound like the SEC has much of a case.
Brokerage houses quite frequently act as the middleman, and that
seems to be what they were doing this time. The timing of the
charges is quite suspect. Bank of America and Chase both reported
quarterly profits over $3 billion, while the senate is getting ready
to vote on a Financial Reform bill. I think this bill is virtually
guaranteed to pass. Even though all the republicans are apposed to
it, I don’t think this is the hot button topic that Health Care was,
and most Americans are probably not apposed to it.

From a technical perspective this could be the catalyst for at least
a minor retracement in the markets. The markets have been overbought
from both a technical and sentiment perspective for the past few
weeks. It is possible that the profit taking could continue this
week.

Weekly Market Update 4/25/10

Well the Goldman Sachs charges do not appear to be the catalyst I
was hoping they might be. The market shrugged of the news and
performed strongly this week and nothing much else has changed.
Market sentiment is still extremely bullish. The small cap portion
of the quarterly ETF portfolio was up over 4% this week.

For several years I had been looking at Barron’s Quarterly Mutual
Fund Report trying to see if there was a way to get better than
average returns with the data in this report. I had been looking
specifically at the “results by sector” section in the Mutual Fund
Report. Then this past year I stumbled upon the “Beating the Market,
3-Months at a Time” and took the time to read it. I liked the book
but a few questions nagged me. It took a bit of time getting the
total returns for the ETF’s tracked, so I wondered if using the
“results by sector” could simplify things. The premise was
essentially the same rotate assets to the best performing ETF’s from
a selected list at the end of each quarter. I was somewhat worried
that the delayed release of the data (6 to 13 days after the end of
the quarter.) could hurt results, but I ended up being more than
satisfied with the results.

Here are the rules I used.
Invest 25% of funds into each of the TWO top-performing sectors in
Group One.

Group One
Sector (ETF)
Large Cap Growth (IWF)
Large Cap Value (IWD)
Small Cap Growth (IJT)
Small Cap Value (IJS)
Large Cap International (EFA)
Large Cap International Growth (EFG)
Large Cap International Value (EFV)

Invest 25% in the top-performing sector in Group Two.

Group Two
Emerging Markets (EEM)
Japan (EWJ)
Europe 350 (IEV)

Invest 25% in the top-performing sector in Group Three.

International Small/Mid Growth (IFSM)
International Small/Mid Value (SCZ)
Pacific Region (VPL)
Pacific Region ex Japan (EPP)
China (FXI)
Latin America (ILF)

If none of the sectors in a group showed a positive return for the
quarter, then keep that portion of the portfolio in cash equivalents
for the quarter. This will help to avoid any prolonged downtrends.

I do not know how Barron’s computes the quarterly sector performance,
but if the ETF performance were any clue, then our recommended
allocation for the following quarter would be.

25% IJS
25% IWD
25% EWJ
25% VPL
(The actual portfolio based on returns in Barron’s were different.)

Again this portfolio is based on a guess of what the actual sector
performances will be. I don’t think Barron’s Quarterly Report will
be published until the second weekend in April.

Here is a link to a worksheet showing the results of this strategy
over the past 10 years.

The system generated two signals over the last two years. It generated a sell signal on January 4, 2008 and kept us out of market until a buy signal was generated July 15, 2009. This is just one more simple system that will keep you out of the market during severe market declines.

This is just one more system that we will be tracking at BuyandHoldisDead.com. Sign-up now for your frequent free weekly updates.