Trade Alert – Equity & ETF Models
In mid-May, we took profits on several of our technology holdings, anticipating a correction in those areas. That correction most likely started yesterday following Broadcom’s (AVGO) earnings release. One thing we have stated for a while is that when the correction in the Semiconductor/Technology names started we would see a rotation to value.
We think trade may have begun, and if we see a further correction in momentum names, some of the more value-oriented names in our portfolio should pick up the slack as a hedge. Therefore, today we are increasing some of those names that have recently corrected to hedge against further rotation. We may be early, as momentum is a hard thing to break, but between now and the Mid-term elections, the risk-off positioning should help.
Equity Model
- Sell 100% of Duke Energy (DUK) and buy 3% of the portfolio in American Electric Power (AEP)
- Increase Walmart (WMT) to 3% and Costco (COST) to 5% of the portfolio.
- Sell 100% of Proctor Gamble and buy 2% of the portfolio in Coca-Cola (KO).
ETF Model
- Reduce XLK back to the target weight in the portfolio (12%)
- Increase XLU to 3.5% and XLP to 5.5% of the portfolio.
- Add 1% of the portfolio to XLB (2.5%)
- Increase XLV to 5.5% 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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