Manager: Kevin Shine, Shine Financial Services
Model: Asset Allocation
Looking at the charts for the stock market during March and April, in both months we saw pullbacks and bottoms during mid month and then strong rallies toward month end. The good news is that we are seeing higher lows and higher highs; the bad news is volatility is increasing.
I feel that we are going to see some higher model return fluctuations due to increasing geopolitical events and policies over the near term.
There have been no changes to the model recently, but indications are that emerging market exposure will be adjusted, taking some profit in the Wisdom Tree Emerging Markets High Dividend Fund (NYSE: DEM) or SPDR S&P Emerging Markets Small Cap (NYSE: EWX) and buying some more Morgan Stanley Emerging Markets Debt Fund (NYSE: MSD).
Commodities and precious metals have seen an enormous jump in volatility, with gut-wrenching price movements in these sectors. I am therefore glad that the model started to underweight gold and silver a month back by selling part of our PowerShares DB Precious Metals Fund (NYSE: DBP).
We have entered a period of higher volatility, and therefore uncertainty, so keeping a well disciplined, diversified portfolio is the smartest way to invest.
