Investment Update

I’m currently on vacation, visiting my oldest daughter who works here at beautiful Kiawah Island Resort outside of Charleston. Yesterday (April 5th) I took allot of risk off the table in our Dividend and Income Plus Model. The “Plus” part of our model involves an approximate 20% allocation to JNK, the SPDR’s High Yield Bond Index. This is held long for its additive value to the portfolio’s overall dividend yield. But since “junk bonds” are considered a fairly high risk asset, I time this holding along the 30 day moving average. Following the 30 SMA would have resulted in several whipsaw trades already this year. So I have held on as the stock market has shown a solid uptrend. But the last few days have been negative for JNK, stock market volatility is rising, and the S&P 500 is showing weakness. Also the first week of April is historically a strong seasonal period, that we obviously are not seeing this year. All this adds up to a good time to raise cash and lower our portfolio’s risk. This puts our income models at an approximate 25% cash position. Also for our ETF growth models we sold our two most volatile holdings – SPHB and QQQ. Again this should add 20% cash to our portfolios. If the markets continue to deteriorate I will continue to rotate into our seasonal, lower volatility holdings. Both of these changes are pre-planned based on weal seasonal factors and market trends. And are part of our normal risk management techniques. Hope everyone enjoys their weekend.

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bill@401advisor.com • 937.434.1790

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Charles H. Dow Award Winner 2008. The papers honored with this award have represented the richness and depth of technical analysis.

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