The MarketClub ETF Portfolio strategy I created at the beginning of this year has been quiet since May. At its core, the service is a trend-following trading system. The strategy I created tracks MarketClub’s Trade Triangle buy/sell signals on four ETFs – USO, SPY, FXE, and GLD. All four ETFs remain in a neutral or short position. For background on the portfolio please see my initial article on the portfolio here.
This portfolio should be looked at more as a collection of trades, rather than a comprehensive portfolio. The positions can remain on a cash signal for weeks or months (both FXE and GLD have failed to give a buy signal in 2012), so rather than simply hold cash a real-world investor may allocate funds to other non-cash investments.
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The reason the “portfolio” has been so quiet is the four ETFs tend to be highly correlated, so when one is on a signal, the other ETFs have a high probability of sharing the same signal. This is not a fault of the signals, but in my choice of ETFs. I may add some uncorrelated ETFs, such as TLT, in the near future in order to increase the number of signals.
MarketClub is a sponsor of Scott’s Investments, but these trades/tests are conducted in near real-time (I typically don’t have time during the day to publish the trades, so I post them in the evening). My objective is to track and test, out-of-sample, the effectiveness of their trade signals.
To track the historical performance and current trade performance click on the “Marketclub ETF Portfolio” on the right hand side of Scott’s Investments.
