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UNLOCKED: RIA PRO Portfolio Trading Action Alert

Written by Lance Roberts | Jul 24, 2019

Since much of the commentary we write is from a “macro view”, many readers, at least judging by the comments we receive, miss the difference between long-range views (the assessment of risk) and the proper portfolio management practices related to navigating the markets (the management of risk.)

This week, we have unlocked out recent portfolio action alert (Subscribe for 30-day FREE Trial) which discusses the recent actions taken in our portfolio. Importantly, the portfolios we run at RIAPRO.Net are “live” accounts and not models.

RIAPRO takes our portfolio management system and puts it online. You can research markets, sectors, and individual stocks, track news and analyst recommendations, and build your own portfolio. Or, you can follow the portfolios we use for our clients.

Over the last couple of weeks we have been suggesting to our subscribers that markets have gotten extremely stretched in the short-term and that a pullback over the next couple of months is likely. From that view, we recently took some actions to raise cash and rebalance portfolio risks accordingly.

While the portfolios are designed to have longer-term holding periods, we understand that things do not always go the way we plan. This monitoring and risk management process keeps us focused on capital preservation and long-term returns.

Before we get into what we did this week, let me give you a quick explanation on how to read the charts.

There are four primary components to each chart:

  • The price chart is contained within the shaded area which represents 2-standard deviations above and below the short-term moving average.  
  • The Over Bought/Over Sold indicator is in orange at the top.
  • The Support/Resistance line (green) is the longer-term moving average which also acts as a trailing stop in many cases.
  • The Buy / Sell is triggered when the green line is above the red line (Buy) or vice-versa (Sell).

When the price of a position is at the top of the deviation range, overbought and on a buy signal it is generally a good time to take profits. When that positioning is reversed it is often a good time to look to add to a winning position or looking for an opportunity to exit a losing position.

NOTE: The portfolio was launched on the 1st trading day of January. So all return numbers are YTD from the point they were added to the portfolio. As noted last week, we said we were going take profits on some of our positions. This week’s position report covers those transactions.

CHCT – Community Healthcare Trust

  • Sold 10% of CHCT at $40.26
  • The position is up 39.30%
  • Stop loss is adjusted to $35

COST – Costco Wholesale Corp.

  • The is the second time we have trimmed COST.
  • We sold 10% at the end of April @ $244.40.
  • We sold 10% this week at $281.39
  • COST is up 35.25% in the portfolio
  • Stop is being adjusted to $240

DOV – Dover Corp.

  • The is the second time we have trimmed DOV.
  • We sold 10% at the end of April @ $97.25
  • We sold 10% this week at $98.28
  • DOV is up 35.14% in the portfolio
  • Stop is being adjusted to $90

MDLZ – Mondelez International

  • The is the second time we have trimmed MDLZ.
  • We sold 10% at the end of April @ $50.55
  • We sold 10% this week at $54.75
  • MDLZ is up 33.59% in the portfolio
  • Stop is being adjusted to $49

MSFT – Microsoft Corp.

  • The is the second time we have trimmed MSFT.
  • We sold 10% at the end of April @ $130.21
  • We sold 10% this week at $137.55
  • MSFT is up 27.67% in the portfolio
  • Stop is being adjusted to $120

V – Visa, Inc.

  • The is the second time we have trimmed V.
  • We sold 10% at the end of April @ $165.46
  • We sold 10% this week at $179.55
  • V is up 34.40% in the portfolio
  • Stop is being adjusted to $155

PG – Proctor & Gamble Co.

  • The is the second time we have trimmed PG.
  • We sold 10% at the end of April @ $105.64
  • We sold 10% this week at $115.26
  • PG is up 19.98% in the portfolio
  • Stop is being adjusted to $100

NSC – Norfolk Southern Corp.

  • The is the second time we have trimmed NSC.
  • We sold 10% at the end of April @ $201.49
  • We sold 10% this week at $196.65
  • NSC is up 30.98% in the portfolio
  • Stop is being adjusted to $180

ABT – Abbott Laboratories

  • We ADDED to our ABT position at the end of April @ $78.65
  • We sold 10% this week at $87.68
  • ABT is up 24.78% in the portfolio
  • Stop is being adjusted to $72.50

VMC – Vulcan Materials, Co.

  • The is the second time we have trimmed VMC
  • We sold 10% at the end of April @ $125.33
  • We sold 10% this week at $138.79
  • VMC is up 30.06% in the portfolio
  • Stop is being adjusted to $120

As we move into the end of summer, the risks are rising that we will likely experience at least a short-term correction of 5-10%. However, with earnings and economic growth continuing to weaken, there is the potential for a larger repricing of risk.

The one overriding concern, from a portfolio management perspective, is that “everyone” seems convinced that “Central Banks” have everything under control and that they have the ability to both avert a recession and keep the bull market going…forever.

From a contrarian point of view, such beliefs reminds me of one of Bob Farrell’s most important investment rules:

“When all experts agree, something else tends to happen.”


Talk with an Advisor & Planner Today!

lance_sig

Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube

2019/07/24
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