Four-Day Performance of Hypothetical Portfolio

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Further to my recent post wherein I introduced a hypothetical portfolio of indices, ETFs, and the 30-Year Bond (in order to broadly track “value” vs. “growth” sentiment), I would offer the following graph which depicts the percentages gained/lost so far this week (as of Thursday’s close).

Market participants favoured the Technology sector, followed by Emerging Markets, Cyclicals, Large-caps, Commodities, Small-caps, and Financials. Homebuilders has been flat and some profits have been taken in the Health Care Sector. Some money was then allocated into 30-Year Bonds.

While there was a blip in volatility on Wednesday, the VIX dropped back below 14.00 on Thursday.

We can see that markets have been willing to add a fair bit of “risk.” While volatility remains low, I’d suggest that we’ll see the markets continue to buy into the “growth” sectors, along with “value” until this sentiment changes.

This weekend’s market update will look at a broader flow of money for the entire week, so be sure to check back for that post.

The following Year-to-date graph shows that, up until now, markets have favoured a fairly “value-oriented” approach (sprinkled with some “growth” segments)…Commodities and Emerging Markets are in negative territory. We’ll see if the buying (as has begun this week) picks up in those areas any time soon. If so, we may also see more money flowing into Bonds as a safety net…in that case, we may see a slow, choppy advance in the general markets as participants rotate into and out of various segments in order to fund further purchases. Otherwise, if we see large-scale draw-downs in Bonds, we may see a much more rapid advance in Commodities and Equities.