Returns for week ending 7/1/11

Returns for the past week:
Model portfolio: +1.2%
Actual managed account: +0.4%

Value of $10,000 invested in model portfolio at inception in 2003: $277,131

Note: The model portfolio and my managed accounts were holding a high amount of cash going into this week, while awaiting a fresh DecisionPoint BUY signal. This explains the lower-than-market returns shown above.

The DecisionPoint timing model threw a fresh BUY signal on Friday, indicating favorable market conditions for holding stocks. The model portfolio's target allocation for a new BUY period is 100% invested. History shows that a DecisionPoint BUY signal marks an opportune time to put capital to work and invest in the model portfolio ...providing an improved return vs. risk. While a BUY signal is no guarantee of gains, it DOES historically indicate a reduced risk of a significant periodic loss before the model portoflio goes on to make a new equity high water mark.

In my managed accounts, I will now be ahering closely to the target allocations.

Returns for week ending 6/24/11

Returns for the past week:
Model portfolio: +0.9%
Actual managed account: +0.4%

Value of $10,000 invested in model portfolio at inception in 2003: $273,728

Note: It's time to be prepared. History shows that, on average, the stock market provides just one or two opportunities each year to buy stocks at relatively depressed prices. These Windows Of Opportunity (WOO) give the astute investor an opportunity to put capital to work in the best stocks just as a new intermediate term rally begins, and then ride the wave as institutional investors ("Big Money") pour THEIR funds into the same stocks, driving up the price further.

The model's internal metrics are suggesting we are nearing one of these times. It pays to be patient. ...and then seize the WOO!

Fortunately we don't need to guess when the time is right. Our model will provide the necessary BUY signal.

Click chart to enlarge

The above chart shows the model portfolio's return for each of the "BUY-NEUTRAL-SELL" signal periods since inception. The Strategic Growth Model takes its BUY-NEUTRAL-SELL timing signals from the DecisionPoint Thrust/Trend Model.

The most recent BUY period ended the week of 6/10/11. The model portfolio returned +28% for the 39 weeks of the BUY period, triggered 39 weeks earlier. This is equal to a 37% annualized rate of return.

The hypothetical returns reflect the performance of the new, improved Strategic Growth Model portfolio as described here a few weeks ago. Actual performance will vary.

The chart shows that the model portfolio declined -15% from its recent peak to the end of the BUY period. This is within the range we've seen for interim losses during the final phase of previous BUY periods. As noted here, the end of a BUY period is the riskiest point in the cycle as far as incurring an interim loss. For this reason, I've advised here that I'm holding more cash in my actual managed accounts than the model portfolio. This has proven to help protect capital that will be put to use during the next BUY period.

Since 4/29 peak, returns:
Model porfolio: -14.8%
Actual managed account: -8.2%

Now that the market has pulled back significantly and is well off its recent highs, the risk vs. return is much improved for investing fresh capital. Upon receiving the next BUY signal from the DecisionPoint Thrust / Trend Model, I intend to invest according to the target allocations shown.

Returns for week ending 6/17/11

Returns for the past week:
Model portfolio: -0.5%
Actual managed account: -0.4%

Value of $10,000 invested in model portfolio at inception in 2003: $271,359

Returns for week ending 6/10/11

Returns for the past week:
Model portfolio: -1.7%
Actual managed account: -1.0%

Value of $10,000 invested in model portfolio at inception in 2003: $272,596


The DecisionPoint.com Thrust / Trend Model is now on a NEUTRAL signal as of today. The TTM drives the model portfolio's target allocations. Upon receiving a NEUTRAL signal, the model portfolio halves its position size from $10,000 to $5,000, raising 50% cash while we wait for a fresh TTM BUY signal.

Since the model portfolio currently holds only 4 stocks (above) the model portfolio allocation is now at 80% cash / 20% stocks. As mentioned before, I continue to hold an even greater percentage of cash in my managed accounts while awaiting a fresh BUY signal. This has helped to preserve capital while we seek a better return vs. risk opportunity to put our capital to work.

Returns for week ending 6/3/11

Returns for the past week:
"New" model portfolio: -1.6%
Actual managed account: -0.5%

Value of $10,000 invested in model portfolio at inception in 2003: $277,344

I continue to hold significantly more cash in my actual managed accounts than in the model portfolio shown here as we await a fresh T/TM BUY signal. This accounts for the difference in performance between the model portfolio and the actual managed account.

Returns for week ending 5/27/11

Returns for the past week:
"New" model portfolio: -1.3%
Actual managed account: -0.6%

Value of $10,000 invested in model portfolio at inception in 2003: $281,711

Note: In my managed accounts I continue to hold more cash than the model portfolio. I expect to continue with a higher cash balance for the duration of this intermediate cycle. e.g. until the Thrust / Trend Model throws a "fresh" BUY cycle.

Returns for week ending 5/20/11

Returns for the past week:
"New" model portfolio: -1.5%
Actual managed account: -0.5%

Value of $10,000 invested in model portfolio at inception in 2003: $285,277

Click below for next week's holdings.

Returns for week ending 5/13/11

Returns for the past week:
Model portfolio: -3.2%
Managed account (actual): -1.9%

Value of $10,000 invested in model portfolio at inception in 2003: $289,727

Note: In my managed accounts I continue to hold more cash than the model portfolio. I expect to continue with a higher cash balance for the duration of this intermediate cycle. e.g. until the Thrust / Trend Model throws a "fresh" BUY cycle.

Returns for week ending 5/6/11

Returns for the past week:
"New" model portfolio: -6.03%
Actual managed account: -3.65%

Value of $10,000 invested in model portfolio at inception in 2003: $299,129

Note: "Actual" return varies from the model's return because I'm maintaining a higher cash position (approximately 50%) until the Thrust / Trend Model (TTM) gives us a fresh "BUY" signal.

As I mentioned last week, I'm doing this because of risk vs. reward. While the "new and improved" model has better returns than before, it also has higher weekly volatility, as we've seen just this past week. Because of this, it's now much more important to time the investment of fresh funds during times where we have a fresh BUY signal from the TTM.

As I noted last week, the market trend has become quite extended above its trend line since the current BUY signal was triggered in September, 2010. The risk of a "normal" market sell-off giving us a significant interim loss in our portfolio is much greater now than if the TTM had just thrown us a fresh BUY signal. In my judgement, this is not a good point in the intermediate term cycle to increase our risk exposure.