How to Use iMarketSignals for Retirement Accounts

A Dynamic Asset Allocation strategy applied to bond- and stock-funds increases returns and reduces risk. During up-market periods more money is allocated to stock funds than bond funds, and conversely during down-market periods more money is allocated to bond funds than stock funds.  The up- and down-market periods come from our MAC-US .

Weekly Data Updates relevant to Retirement Accounts

(i) The MAC-US: If sell-spread falls below zero a down-stockmarket is signaled. Subsequently when buy-spread moves from below to above zero an up-stockmarket is indicated.

Fig-2.-8-28-2020.png 9/25/2020: Latest update only available to Bronze members

8/28/2020: The MAC-US model is invested in the markets..

 

(ii) The Recession Indicators COMP, BCI and FRR2-10:  If a recession is signaled it may be advisable to exit stock market completely. These three recession indicators have different lead times: FRR2-10 an average of 14 months, BCIp an average of 20 weeks, and COMP (as well as BCIg) an average of 10 weeks.

Fig-3.-8-28-2020.png 9/25/2020: Latest update only available to Bronze members

8/28/2020: show=0]

 

Market Signals Summary:

Both MAC-US and the 3-mo Hi-Lo Index have switched back into the market. The bond market model avoids high beta (long) bonds, and the yield curve is steepening generatin a buy STPP this week.

. The Gold Coppock , iM-Gold Timer remain in gold. The Silver Coppock model is also invested in silver

The iM-GT Timer, based on Google Search Trends volume is invested in the the markets since 7/1/2020.

Stock-markets:

Fig-2.-5-25-2015 The MAC-US model switched back into the markets..

 

BCI-8-27-2020.png 9/24/2020: Latest update only available to Bronze members

8/27/2020: gn=”right”>

iM-Weekly Unemployment Monitor

WCEM-Fig-1-5-25-2015 Today’s DOL Unemployment Insurance Weekly Claims signals a cautious improvement in the insured employment situation.

Positive takeaway is that the non-seasonal adjusted continuous insured unemployed at 12,264,351 are down by 176,510, a marked slowdown in improvement after last week’s 1,034,052 reduction.  Also positive, the total persons claiming some form of UI benefit as of September 5 are reported by the DOL as 26,044,952 a decrease of 3,722,513 from last week’s figure. However, this positive trend is not reflected in the non-seasonal adjusted initial claims which increased  by 28,527 to 824,542.

Please refer The iM-Weekly Unemployment Monitor

Fig-3.2-9-18-2020.png 9/25/2020: Latest update only available to Bronze members

9/18/2020: The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is above last week’s level.

A description of this indicator can be found here.

(iii) The Bond Value Ratio (BVR): To determine whether to be invested in long-bond funds or short-bond funds.

Fig-4.-8-28-2020.png 9/25/2020: To view latest update please log in

8/28/2020: The BVR-model avoids high beta bonds (long-bonds) and also intermediate duration bonds.

The Bond Value Ratio is shown in Fig 4 and is near last week’s value.  According to the model, only when BVR turns upward after having been lower than the lower offset-line should one consider long bonds again.

 Monthly Data Updates relevant to Retirement Accounts

(iv) The Unemployment Rate Recession Model:  If a recession is signaled it may be advisable to exit stock market completely.

Fig-8.-8-7-2020.png 9/4/2020: To view latest update please log in

8/7/2020: 4>
The 9/4/2020 employment report claims 8.4% UER (last month 10.2%) and a total labor force 160,838,000 for mid-August 2020. However, the 9/3/2020 unemployment insurance report shows 29,224,546 persons claiming UI benefits week ending August 15.  Thus 29.24/160.84 = 18.2% (last month 19.5%) UER calculated from the unemployment insurance claims for exactly the same period.

 

CAPE-Cycle-ID

Fig-9a-5-25-2015Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE;  the level switched from 0 to +2 end of June 2020. This indicator is described here.

To avoid the bear market, exit stocks when the spread between the 5-month and 25-month moving averages of S&P-real becomes negative and simultaneously the CAPE-Cycle-ID score is 0 or -2. (read more)

 

Estimated Forward 10-Year Returns

Fig-9b-5-25-2015The estimated forward 10‐year annualized real return decreased to 6.3% (previous 6.8) with a 95% confidence interval : 5.0% to 7.0% (previous 5.5% to 8.1%).

 

 

iM-GT Timer

Fig-10-5-25-2015The iM-GT Timer, based on Google Search Trends volume indicator is invested the markets  since  7/1/2020. This indicator is described here.

(iv) The TIAA Real Estate Timed Account :   If rolling 1-year return falls below 0% model goes to cash. Subsequently when rolling 1-year return moves above 0% a new investment is made.

Fig-10.-8-7-2020.png 9/4/2020: To view latest update please log in

8/7/2020: >
The 9/4/2020 employment report claims 8.4% UER (last month 10.2%) and a total labor force 160,838,000 for mid-August 2020. However, the 9/3/2020 unemployment insurance report shows 29,224,546 persons claiming UI benefits week ending August 15.  Thus 29.24/160.84 = 18.2% (last month 19.5%) UER calculated from the unemployment insurance claims for exactly the same period.

 

CAPE-Cycle-ID

Fig-9a-5-25-2015Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE;  the level switched from 0 to +2 end of June 2020. This indicator is described here.

To avoid the bear market, exit stocks when the spread between the 5-month and 25-month moving averages of S&P-real becomes negative and simultaneously the CAPE-Cycle-ID score is 0 or -2. (read more)

 

Estimated Forward 10-Year Returns

Fig-9b-5-25-2015The estimated forward 10‐year annualized real return decreased to 6.3% (previous 6.8) with a 95% confidence interval : 5.0% to 7.0% (previous 5.5% to 8.1%).

 

 

iM-GT Timer

Fig-10-5-25-2015The iM-GT Timer, based on Google Search Trends volume indicator is invested the markets  since  7/1/2020. This indicator is described here.

Dynamic Asset Allocation Models (monthly)

(vi) Vanguard Systems: Historical performance and current allocations are shown for three systems: 1a, 2a and 3a. The three different systems range from a mix of conservative index funds to moderately aggressive managed Vanguard funds. Each system has three sub-systems with different allocations between bond- and stock-funds (20/80, 30/70 and 40/60). For example, 20/80 signifies a nominal allocation of 20%bonds and 80%stocks during up-market periods, and 80%bonds and 20%stocks during down-stock market periods. The most conservative allocation would be 40/60. Although the models use particular bond funds, it may be advisable to consult the BVR model to determine whether to be invested in long-bond funds or short-bond funds.

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Fig13.2s4b-4-7-2015 12/7/2018: Performance comparison of the iM Vanguard Systems, read more ....

(vii) Vanguard + TIAA Systems: Historical performance and current allocations are shown for four systems: 1b, 2b, 3b and 4a. The four different systems range from a mix of conservative index funds to moderately aggressive managed Vanguard funds in combination with the TIAA Real Estate Account. Each system has three sub-systems with different allocations between bond- and stock-funds & TIAA Real Estate Account (20/80, 30/70 and 40/60). The most conservative allocation would be 40/60. Although the models use particular bond funds, it may be advisable to consult the BVR model to determine whether to be invested in long-bond funds or short-bond funds.

Fig13.2s4b-4-7-2015 12/7/2018: Performance comparison of the iM Vanguard Systems combined with TIAA Real Estates timed, read more ....

 iM-News eMail Service

(vii) Friday’s Weekly Update: A ticked box indicates that you will receive Friday’s update email. (You can toggle the tick by clicking on the box.) The email notifies, subject to membership category, any signals that may have been generated, as well as the current nominal allocations for the above models are publicized.

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