Trade Alert – Equity & ETF Models
In both models, we are adding to our short-position to hedge portfolios near term. This is not a bet on an ongoing market crash, but as we pointed out previously, after the market breaks the 200-DMA, it is not uncommon to see a reflexive rally that fails and retests previous lows.
We have previously reduced equity risk, but most of our holdings are in companies we want to own long-term and are currently deeply oversold. As such, adding a broad-market hedge to further reduce risk is easy.
We now have a 5% position in SH. If the market recovers the 200-DMA and holds above it, and momentum turns positive, we will remove the hedge and start adding to our long-positions.
Equity Model
- Add 2.5% of SH to the portfolio.
ETF Model
- Add 2.5% of SH to the portfolio.
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Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube
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