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Q1 2019 Portfolio Update

February 13, 2019


This week we have placed several trades to update our portfolios based on our recently completed Q1 2019 Investment Committee Meeting. In a nutshell, we are slightly underweighting our exposure to stocks and increasing our exposure to bonds.


We believe that the risk premium for equities is now limited and an underweight is justified. As you can see from the table below, we are underweight by 1% to equities and have moved those proceeds to fixed income for a net 1% overweight. 


We are overweight slightly in each category (equities & fixed income) to U.S. stocks and bonds versus international stocks and bonds as can be seen below due to the fact that we think the U.S. continues to offer better economic growth, superior profitability, higher corporate stock buy back rates, and a more defensive nature when compared to international investments. 


We have also added a cash exposure for the first time in quite a while to the Preservation and Conservative Models as cash is finally returning enough to make it a viable buffer to the volatility of much of the other asset classes. 


Lastly, we have upended the Liquid Alternative category by adding a ladder of new ETFs into our models that offer downside protection with some upside possibility. This addition will provide ballast to the rest of the portfolio and should offer some protection should a recession come sooner rather than later. These ETFs recently were praised as one of the "best ETFs no one has heard of" in an industry trade magazine article. Well, guess what? We knew of them before this article and had already met with the ETF company to determine how best to implement these novel ETFs in our models. So we are looking forward to having some of this downside protection.


So that's it for now. Until next time...




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