July 20, 2023: We recommend the following changes to our Model Fund Portfolio:
- Reduce the Invesco S&P 500 Equal Weight Technology ETF (symbol: RSPT) from 6% to 4%. We are taking profits off the table in this fund after a period of strong performance.
- Exit the Fidelity Select Telecommunications Portfolio (symbol: FSTCX). We are exiting this fund due to technical weakness and ongoing structural headwinds.
- Initiate an 8% position in the ProShares S&P 500 Dividend Aristocrats ETF (symbol: NOBL). NOBL invests in quality companies that have raised their dividend for at least 25 consecutive years. These companies have been largely ignored by investors who have chased after speculative and momentum stocks so far during this rally, a trend which could potentially reverse in the second half of the year.
Current data continues to indicate that the U.S. economy is likely headed for a hard landing, a point which was confirmed by the Leading Economic Index (LEI) suffering its 15th straight monthly decline in this morning’s report. However, resilience in certain areas of the economy means that a soft landing is possible – although still an unlikely outcome. As a result, we are taking these steps to further limit risk in the Model Fund Portfolio while also investing in areas that present current profit opportunity.
The Model Fund Portfolio now has a 51% invested allocation with the remainder (49%) held in short-term Treasurys or a money market fund.