Market pulled back a little bit, but still booked a surprising month, +5.5% from 12/30 close price. It is stronger than I expected. The monthly high was 1330, 10 points above my expected range. The long waiting wave 3 down is not happening.
As I mentioned in the post waiting for wave 3, I am holding 20% Gld (Gold), 20% UUP (US Dollar) and 60% Bond products last month. Gold had a very good month, with 11.6% gain, LTPZ the Bond ETF in my portfolio also booked 3.2% return, while UUP lost 2% value. Overall, the LMP recorded a return of 3.6%. Below is a table for comparison. LMT beats 3 normal strategies, but lost to the all equity strategy.
| 12/30/2011 | 2/1/2012 | ||||||
| TLT / (BOND) | 121.25 | 119.18 | -1.71% | ||||
| SPY / (Equity) | 125.5 | 132.47 | 5.55% | ||||
| Percentage | |||||||
| Bond | 100% | 60% | 40% | 0% | |||
| Equity | 0% | 40% | 60% | 100% | |||
| Total | 100% | 100% | 100% | 100% | |||
| Return | |||||||
| Bond | -1.71% | -1.02% | -0.68% | 0.00% | |||
| Equity | 0.00% | 2.22% | 3.33% | 5.55% | |||
| Total | -1.71% | 1.20% | 2.65% | 5.55% | |||
For the new month, I have everything on buy side.
The 5 IVY portfolio components are
- SP 500 (Risk ON)
- MSCI EAFE (The Most Famous International Index) (Risk ON)
- U.S. 10-Year Government Bonds (Risk ON) / USD (Risk ON)
- NAREIT (U.S. Real Estate Index) (Risk ON)
- SP GSCI (Goldman Sachs Commodity Index) (Risk OFF)/ GLD (Risk ON)
As I mentioned couple times, this is not a market that I can comfortably holding longs. Even though buy signal everywhere, I still want to be very cautious at this moment. I had some research on real estate. I believe I can invest now. From the Chinese data last night, I think China got soft landing. The entire emerging market may be safe. I want to hold off on the US equity portion for another couple weeks.
In summary, my holdings after the rebalance are (roughly):
20% Emerging Market
20% Gold
20% Bond
20% Real Estate
20% USD (to decide when to invest in US equity)
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