INVESTECH MODEL FUND PORTFOLIO CHANGE
Gold has continued to experience rapid growth through the start of 2026, with the price of gold rising over $600 to $4980. The Gold Miners position held in the Model Fund Portfolio (GDX) has increased +215% since the start of last year! While technicals indicate that gold may have the potential to climb higher, history shows that riding a parabolic curve can be dangerous because the fall is often faster than the trip up. As a result, we recommend taking some profits off the table.
- Decrease the Van Eck Vectors Gold Miners ETF (Symbol: GDX) to 4%. [Note: Due to recent gains, actual GDX allocation had increased well above 5% in the Portfolio]. We are taking advantage of the opportunity to secure gains while still maintaining a position in this defensive hedge.
Following this change, the Model Fund Portfolio has a net invested equity allocation of 54%. This is comprised of 59% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 31% cash held in short-term Treasurys or a money market fund.
MACROECONOMIC UPDATE
- Pending Home Sales tumbled in the latest release, dropping -9.3% from the prior month. This plummet in Pending Sales will likely translate into lower sales for existing homes in the early months of 2026. Read our Market Insight for more details on this unexpected report.
- A delayed release for the Personal Consumption Expenditures (PCE) Price Index came out this week, showing continued sticky inflation. Both Overall and Core PCE –which removes the volatile food and energy components– came in at 2.7% year-over-year in October and 2.8% in November. This report confirms that the Fed is unlikely to cut rates at the end of the month with their favored inflation measure stuck well above their 2% target.
- Consumer Sentiment rose in the final release for January from 52.9 to 56.4. Both assessments of current conditions and future expectations increased as well. While this improvement was broad based, Sentiment remains more than -20% below where it was a year ago as consumers remain pessimistic.
- A delayed release showed the Leading Economic Index (LEI) from the Conference Board declined -0.1% in October and -0.3% in November. The LEI continues to predict a slowing economy in 2026. This normally leading report is currently lagging behind as it is reliant on component data from government agencies that are still delayed due to the government shutdown last year.
TECHNICAL UPDATE
- InvesTech’s Gorilla Index briefly fell to its lowest level since August 2025 before bouncing slightly later in the week. It remains well below the peak from late last year as mega-cap momentum stocks continue to lag the broader market. If this Index falls further, it would be a worrisome sign that the rest of the market is heading for trouble.
- InvesTech’s Artificial Intelligence Index also fell below recent lows earlier this week, as the speculative favorites showed vulnerability to market volatility. With this Index sitting -17% off its all-time high, it is a concerning sign that investor exuberance is fading.