After one week in business with the new system I have simply transferred current holdings into the spreadsheet.  I’ll up-date and make changes as needed.  Markets continue volatile and I have not bought or sold anything, but I show the positions I have held for some time. Obviously my spreadsheet needs some work.

I am still looking for a strong up move starting soon, despite gloomers’ and doomers’ wails of despair. Or maybe because of it.

Good hunting.

After a lot of testing and re-testing I have decided to make some changes to my program. 

While still using ETFs (Exchange Traded Funds)  I will restore the 5 Position Model Portfolio we were using in the old CAPP system.  But I will also change the format.  The 5 positions will now be devoted to 5 Asset Classes as follows:

Pos 1     North American Equities.

Pos 2     Bonds

Pos 3     Commodities

Pos 4     Real Estate

Pos 5     Foreign and Emerging Markets

Testing going back to 1972 showed that this Asset Allocation model has outperformed the S & P by 7 – 9% points and showed NO losing year during that period.  Thus, LESS RISK AND GREATER POTENTIAL GAIN.

Positions will be invested in the applicable Asset Class as our market timing indicators dictate.  It is not likely that all 5 positions will be invested at the same time as the asset classes usually do not all rise and fall together. 

Tax implications should be minimal.

I have created a spreadsheet showing a model portfolio of $100,000.00 with 5 positions of $20,000.00 each devoted to each of the 5 Asset Classes. This plan should avoid any major market declines and profit from periods of rising markets.  

It is my intention and hope to report on this program every week.

Keep Well,

Ted Lagerway

Or rather weeks.  It’s been a wild ride.  Needless to say I have not been in a buying mood.  But I have not sold anything either – yet.

The TSX Energy index ETF (XEG-TO) has been a disappointment.  Even when oils went up the ETF has lagged and is now just above my forced stop-loss of 10%.  If it should hit that level I’ll have to sell.  However, I believe energy prices will rise with the looming heating season, which my save my bacon.

The Materials ETF (XMA-TO) is doing OK and showing a modest profit as is the iShares 60 ETF (XIU-TO).  My lone stock, Enerplus Res. (ERF.UN-TO), is doing OK too. It’s paying me a nice dividend every month yielding about 9% per year.  Should natural gas prices rise to $6.00 or $8.00 this winter, as I expect, Enerplus may go up to the $48.00 I am looking for. If the price should slump below $23.00 in the meantime I’ll just buy more.

Enjoy the game.

TL