Mechelany Advisors’ MODEL PORTFOLIO has been running in a fully transparent way since January 1st 2014. Its Purpose is to implement the conclusions of our research analytical process in a portfolio managed using institutional liquidity, diversification, risk management and asset allocation processes. In our TRANSACTION UPDATES we keep our reader informed in real time of the transactions in our MODEL PORTFOLIO
As announced last week-end, we are gradually reducing our long exposure to equities in our Model portfolio and re-instated some of our tech stocks short positions today.
In the past two days we have added TAISEI Corp in Japan and ENERGY TRANSFER in the Usa as promising investments and diversification into new sectors. ( See our Investn^ment recommendations articles )
Tactically reducing exposure to China
As we are entering the Chinese Holiday Season next week, we have taken profits tactically on some of our profitable investments in Chinese Hong Kong shares just to reduce our exposure somewhat in what will be far less liquid markets next week. We still like those investments for the long term but could see some temporary weakness ahead.
Hedging and reducing our European equity exposure
The markets are euphoric but the momentum is weak and we prefer to protect our portfolio gradually on the way up as highlighted over the week end. We have re-instated our hedges on European stocks and have cut our position on RWE after the announcement of the early departure of its CEO.
Increasing GOLD and very bullish on Platinum
As the US dollar is turning, we take advantage of the weakness in Gold mining stocks to increase our exposure gradually. We are extremely bullish on Platinum but our allocation is already at its maximum so we are not adding but we are also not taking our 40 % profits yet.
Taking some profits in the US and re-instating our short positions in big tech
Biotechnology is in a vertical acceleration and we have decided to take some money off the table and taking our 35 % profits on half our position in the BIB US Biotechnology ETF.
The lack of upside momentum in big tech has also led us to re-instate our short positions in Microsoft and Netflix, increasing the short side of our portfolio globally.
We are waiting for the signal to initiate a new short position on the Russell 2000 US small and Mid cap index.
And for the first time in many years now, we have re-instated a long position in US Treasury bonds as yields reached 2 % this morning.
We are clearly worried about the back-up in bond yields and the significant rise in inflation expectation, following significant cost-push pressure coming from both commodity prices and wage increases. Joe Biden’s plan to raise minimum wages to 15 $ is expected to cost the US economy about 1.5 million jobs but also to lift 900’000 Americans out of poverty.
Another measure announced to tax capital for wealthy individuals owning more thanUSD 1 billion is a significant step, that will raise 2.5 Billion in revenues 97 % of which will be paid by four people only. Nut what it really means is that Biden is clearly determined to close the wealth gap and fight poverty in the US.
New Asset Allocation
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