Trade Alert – Equity And ETF Models
This morning, we reduced our exposure to energy slightly. Increased chances of a pact between Israel and Hammas/Hezbollah are pressuring crude prices, as are signs of economic weakening. Furthermore, oil prices have historically declined during Fed rate-cutting cycles as those cuts are in response to economic weakness.
However, despite reducing exposure, we remain slightly above the S&P target weights in both models. There is a large short position in crude oil, one reason we are reluctant to reduce further.
Equity Model
- Reduce both Exxon Mobil (XOM) and Diamond Back Drilling (FANG) to 1.5% of the portfolio each.
ETF Model
- Reduce the SPDR Energy Sector ETF (XLE) to 4.5% of 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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