JULY 31, 2013 > RMG Action

July 31, 2013

VTI closed out its month at $ 87.42, putting it 11.4% above its 200 day moving average.

This means over the next days I will invest an additional 25% of my market designated resources as follows:

VTI –               45% of  funds allocated

SPY-                20 % of funds allocated

QQEW –         20% of funds allocated

VB –                15 % of funds allocated

I will purchase as many shares as possible with each of  the designated amounts hoping, over time, to receive 13 eggs to the dozen etc.

The same dollar amount will be injected September 30 if VTI is still above its 200 day moving average on that date.

I will sell all accumulated shares on August 31 ( or any month end )  VTI’s closing price is below its 200 day moving average. Then I would wait for the next month end that VTI’s price is above its 200 day moving average and go all in over the next several market days.

To give you some flavor of the market, I show below the progress of the principal ETFs I follow.  It shows that the  rewards for going beyond plain vanilla index funds into sector funds can be enticing. On the flip side, you can be reasonably certain sector ETFs carry the potential for  punishment beyond index  funds if the market turns  or if the relative strength of the theme driving the performance  dissolves.

Since June 30, 2013

XIV  – plus 35.1%  – (  derivative inverse VIX ),  FBT – plus 9.5% – (  biotech sector equal weight-  20 names ),  KBE – plus 8.8%  ( money center banks sector ) ,  XLV – plus 7.2%  ( health care sector ),

QQEW – plus 7.1% (  Nazdaq 100 index – equal weight ),  VB – plus 6.8% ( Vanguard small cap index ),  RPG – plus 6.1%  ( S&P 500 growth selections ), SDY – plus 5.8% ( S&P 500 consecutive dividend payers )

VTI – plus 5.7% ( Vanguard Total USA Stock Market Index ), RSP – plus 5.6% – ( S&P 500 equal weight ) OEF – plus 5.3% – ( S&P 100 Index ),  XLF – plus 5.3% ( Financial Sector ),

SPY – plus 5.2% ( S&P 500 Index ),  DIA – plus 4.2% ( Dow Industrials 30 ),  GLD – plus 7.4% – ( physical gold held in storage ) ( the only year to date negative performance – negative 21% )

I’m remaining with plain vanilla  ( VTI, SPY, QQEW, and VB ) and trusting my trend following model to deliver performance.

Richard Maurice Gore

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