Model Age Curve Master Portfolio Performance Update
February 5, 2010
The model Beacon Master Portfolio is showing a return of 70.9 percent, and represents a 54.7 percent outperformance over the S&P Global Index ETF (IOO) return of 16.2 percent, since our "Generational Opportunity" buy signal of December 5, 2008.
The model's trend of outperformance is continuing into its second year from December 5, 2009 to January 29, 2010. The model is up 1.6 percent versus a negative return of 10.2 percent for the S&P Global Index ETF (IOO).
This week we saw fear continue to the batter the stock market, as the Bulls scratched their heads, cursed anything Greek and slid down the "Slope of Hope." The current 9.2 percent correction from the January 19 high has pushed the S&P 500 Index and its ETF (SPY) down below its 50-day moving average. This is similar to but greater in percentage terms than the mini corrections seen in July (down 7%), and in November (down 5%).
Our 2010 NDR Road Map called for market weakness in late January before heading higher into April. The sharp pullback has been accompanied by a healthy retreat in investor sentiment. The NDR Crowd Sentiment Poll fell back to 50.4, placing it in to the neutral band. However, the S&P 500 did close below our new 1080 stop on Friday, and this has forced us to take a more cautious approach to markets. This involved weeding out weak performing positions and the continued avoidance of over-believed and over-valued themes (China and commodities in particularly).
The question most in our minds is, "Has the Summer Correction (10 to 15%) Arrived Early?" Perhaps, we will continue walk a short term cautious path and will be guided by investor sentiment. We will return as aggressive buyers once investor sentiment has return to 45 to 42 on the NDR sentiment model versus its current level of 50.4.
We have replaced our short term stop-loss at 1060 on the S&P 500 or 106 on the ETF (SPY). At this point, we would look to shift to a more defensive portfolio stance to protect the model's capital.
Performance from 5th Dec. 2008 to 5 Feb. 2010
Model Portfolio/Index |
Return% |
Var.% |
| Model Beacon Master Port. | 70.9 | |
| S&P Global | 16.2 | 54.7 |
| S&P 500 | 21.3 | 49.6 |
| Canada MSCI Index | 58.7 | 12.2 |
| UK MSCI Index | 27.5 | 43.4 |
| Commodity Index | 13.6 | 57.3 |
| US Bond Index | 5.1 | 65.8 |
Performance from 5th Dec. 2009 to 5 Feb. 2010
Model Portfolio/Index |
Return% |
Var.% |
| Model Beacon Master Port. | 1.6 | |
| S&P Global | -10.2 | 11.8 |
| S&P 500 | -3.9 | 5.5 |
| Canada MSCI Index | -5.4 | 7.0 |
| UK MSCI Index | -9.3 | 10.9 |
| Commodity Index | -8.5 | 10.1 |
| US Bond Index | 0.3 | 1.3 |
