Friday was the last trading day of the month of August. Time to update the IVY timing portfolio signals. This post updates the signals for the basic IVY 5 asset class timing portfolio, also known as GTAA 5.
You can see the signals at world beta or at dshort as well. I have my own tracking spreadsheet on-line as well. Below is a snapshot of this month’s signals.
You can see the spreadsheet on line here. The spreadsheet updates daily but remember that only the prices at the end of the month are used to generate buy/sell signals. I also have a version of the basic IVY that uses different ETFs for the commodities (GSG in place of DBC) and bonds (VGIT in place of IEF) portions of the portfolio. GSG and VGIT have slightly lower fees than their counterparts. Also, note that due to the different composition of the ETFs the buy/sell signals may be different.
For this month both VNQ and VEU generated sell signals. VNQ is well down from its high and generated a strong sell signal by -5.03%. VEU just barely broke the 200 day SMA and generated a sell signal by just -0.11%. There is a good chance that this could be another false signal in VEU. For those who want to try and avoid a false sell signal you can wait for a follow through to the downside before selling VEU. Both IEF and DBC remain on sell signal. That leaves the overall portfolio just 20% invested and 80% in cash. The lower cost IVY model is 40% invested die to GSG being on a buy signal.
For previous posts on the basics of the IVY timing model and its performance see here and here. There are also posts on extensions to the basic IVY portfolio to include more asset classes (here) and some more aggressive models (here). Finally, this post discusses fees, commissions, and taxes.
5 Comments
Janna · September 2, 2013 at 7:00 pm
Hey Paul–looks as if you and Nina have landed in paradise again! Question for you–when buying individual stocks, do you sell those stocks taking your profit when they have reached a level decided by you when originally buying or do you just hang on to the stocks as long as they are increasing in price? One of those talking head people has a popular saying, “pigs get slaughtered.”–do you have any thoughts on that concept???
libertatemamo · September 3, 2013 at 6:55 am
Hi Janna, my sell rule for an individual stock depends on why I bought it in the first place. If I bought it as part of my long term individual stock portfolio then I only sell if my original reason for buying the stock changes. For example if I bought it for a certain dividend growth rate and that doesn’t materialize after a while I would sell the stock. If I bought a dividend stock and thought the dividend was in jeopardy I would probably sell. But I would not sell because of price rising alone.
Now, if I bought the stock for a trade, then I usually have several price targets. I usually will take some off (1/3) at a certain profit level and let the rest run with a trailing stop in mind (usually at some key technical level). If a trade I also have absolute stop losses below my buy price.
For me the most important thing is to have a clear reason on why you bought a stock in the first place. Then its easier to come up with a sell rule.
Paul
Ken · September 2, 2013 at 7:38 pm
I really enjoy your blog. I have started investing using the simple 5 ivy timing portfolio. I know we’re only supposed to use the pricing and to trade on the last trading day of the month. Why is that? Why not the first day, or the middle day of the month? Thanks
– Ken
libertatemamo · September 3, 2013 at 6:44 am
Hi Ken, the end of the month is used for no other reason than it is simple to track. Its easy to pull monthly prices from lots of websites and monthly prices use the price on the last day of the month as THE price. If you wanted to you could use any other day of the month as long as you waited in one month intervals to make decisions and calculated the 10 month moving SMA based on those intra month prices.
I’ve often thought of using mid-month prices but I’ve found no easy way to implement such a system.
Paul
An IVY Buy & Hold Portfolio for the Skeptical & Emotional Investor | Investing For A Living · September 20, 2013 at 9:59 am
[…] many investors this is where an automatic approach like the IVY Timing model that I discus often here can be the best approach, particularly for retirees. But, I realize that many investors remain […]
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