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Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21

Summary:
Last Monday, as our indicators started to flip over, we sold off our equity index “trading positions” to raise cash levels in portfolios. We remain primarily allocated to the market in our holdings but are willing to reduce exposure further if markets show increasing weakness. Just as a reminder from last week, we highly recommend, if you have not done so already, to take some action to rebalance portfolio risk accordingly. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits) Sell Those Positions That Aren’t Working. If they don’t rally with the market during this recent rally,  they will decline more when the market sells off again. Move Trailing Stop Losses Up to new levels. Review Your Portfolio Allocation Relative To Your Risk Tolerance. If you have

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Last Monday, as our indicators started to flip over, we sold off our equity index “trading positions” to raise cash levels in portfolios. We remain primarily allocated to the market in our holdings but are willing to reduce exposure further if markets show increasing weakness.

Just as a reminder from last week, we highly recommend, if you have not done so already, to take some action to rebalance portfolio risk accordingly.

  1. Trim Winning Positions back to their original portfolio weightings. (ie. Take profits)
  2. Sell Those Positions That Aren’t Working. If they don’t rally with the market during this recent rally,  they will decline more when the market sells off again.
  3. Move Trailing Stop Losses Up to new levels.
  4. Review Your Portfolio Allocation Relative To Your Risk Tolerance. If you have an aggressive allocation to equities at this point of the market cycle, you may want to try and recall how you felt during 2008. Raise cash levels and increase fixed income accordingly to reduce relative market exposure.

Such is the same process we follow consistently with our client portfolios and our asset models. It isn’t glamorous, but it is a simple routine we can replicate when signals occur.

The key to successful portfolio management over time is having a systematic, repeatable process to follow. Much like baking a cake, as long as you follow the recipe, it is hard to mess things up.

With weekly “buy” signals intact and money flows still positive, there is no need to get heavily defensive. We think that time is coming, but likely sometime this summer. 


The MacroView

Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21

If you need help or have questions, we are always glad to help. Just email me.

See You Next Week

By Lance Roberts, CIO


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Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21


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Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21

Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21

If you need help after reading the alert, do not hesitate to contact me.

Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21


Model performance is a two-asset model of stocks and bonds relative to the weighting changes made each week in the newsletter. Such is strictly for informational and educational purposes only, and one should not rely on it for any reason. Past performance is not a guarantee of future results. Use at your own risk and peril.  

Stocks Vs. Rates – Which One Is Most Likely Right? 04-24-21

Have a great week!

Lance Roberts
Lance Roberts has sharpened that lens with 30 years in the investing world from private banking and investment management to private and venture capital. Lance Roberts’ perspective and common sense analysis is sought after by media outlets such as Fox 26 News in Houston, CNBC, CNN and Fox Business News along with numerous publications including the Wall Street Journal, USA Today, Reuters and the Washington Post. Roberts is the Editor of the X-Factor report and publishes the blog Daily X-change.

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