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.-2-28-2020.png 3/27/2020: Latest update only available to Bronze members

2/28/2020: The MAC-US model switched out of the markets. The sell-spread (red line) is below last week’s value.

 

(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.-2-28-2020.png 3/27/2020: Latest update only available to Bronze members

2/28/2020: show=0]

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Market Signals Summary:

All iM US market macro models are in the stock market as is the australian  MAC-AU. The recession indicators iM-LLI and iM-BCIg do not signal a recession. The bond market model avoids high beta (long) bonds, and the yield curve is flattening and a buy FLAT was generated 2/21/2020 and the BVR reached a new record high on 2/27/2020. The Gold Coppock and iM-Gold Timer remains invested in gold, however the silver model is in cash.

 

Stock-markets:

Fig-2.-5-25-2015The MAC-US model switched into the markets on 2/26/2019. The sell-spread (red line) is below last week’s value and needs to move below zero to generate a sell signal.

 

BCI-3-5-2020.png 4/2/2020: Latest update only available to Bronze members

3/5/2020:
The BCI at 249.0 is down from last week’s 253.1, and is below the previous high for this business cycle indicated by the BCIp at 6.6, which signals a recession.  Also, the 6-month smoothed annualized growth BCIg at 3.8  is down from last week’s 6.2.  BCIg probably will below zero next week or the week thereafter.

Fig-3.2-3-20-2020.png 3/27/2020: Latest update only available to Bronze members

3/20/2020: The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is above last week’s level and is not signaling a recession.

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.-2-28-2020.png 3/27/2020: To view latest update please log in

2/28/2020: The BVR-model avoids high beta bonds (long-bonds) and also intermediate duration bonds.

The Bond Value Ratio is shown in Fig 4.  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.-2-7-2020.png 3/6/2020: To view latest update please log in

2/7/2020: The unemployment rate recession model (article link), has been updated with the February UER of 3.5%. The model does not signal a recession. Note: The UER reflects the employment situation of mid February, thus do not include any possible impacts of the COVID-19 virus.

Here is the link to the full update.

(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.-2-7-2020.png 3/6/2020: To view latest update please log in

2/7/2020: >
Fig-8.-5-25-2015The unemployment rate recession model (article link), has been updated with the February UER of 3.5%. The model does not signal a recession. Note: The UER reflects the employment situation of mid February, thus do not include any possible impacts of the COVID-19 virus.

Here is the link to the full update.

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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