February 6, 2026: We recommend the following change…
Our AI Index collapsed this week as speculative investments experienced a sharp reversal in investor enthusiasm (see Market Insight). The Gorilla Index also broke support levels and is now -10% off its peak from late October last year. It continues to display weakness even through today’s market bounce. With gold’s sharp reversal followed by today’s rebound, we are taking advantage of the opportunity to secure further gains in GDX which remains up over+10% this year and +187% from the start of last year:
- Decrease the VanEck Vectors Gold Miners ETF (Symbol: GDX) from 4% to 3%. We already harvested profits off this holding just prior to gold’s peak above $5,000 last week. With broad weakness hitting the speculative areas of the market and now moving into the mega-cap momentum stocks, gold has shown less resilience and investing discipline dictates that we trim the position while still maintaining a holding in this defensive hedge.
Following this change, the Model Fund Portfolio is comprised of 58% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 32% cash held in short-term Treasurys or a money market fund. This results in 53% net equity exposure.