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Investment advisor Bluegrass Portfolio Management announces strong six month results for managed accountsBetween September 14th, 2005 and March 13th, 2006, the model fund allocation gained 8.71%, as verified by TimerTrac.com. During that same time, the S&P 500 gained 4.30%.
Senior portfolio analyst James Brumley noted that the strong numbers were largely the result of a strategic decision made in the middle of last year to overweight with foreign and international holdings. Japanese and European index funds made up 40 percent of the model's holdings. The remaining 60 percent of the portfolio was split evenly among a small-cap value fund, and cash.
"The London FTSE-100 gained 11.5 percent over that six month period, and the DAX-40 [Germany's most well-known market index] rallied 19.4 percent during that time" Brumley explains. "At the same time, the CAC-40 ( France's leading index ) added 14.7 percent, while the NIKKEI ( Japan ) shot up by 26.8 percent. Clearly this is where you wanted to be over the last few months" he adds.
As for why he decided to migrate so heavily into foreign investments in the first place, Brumley gave a couple of reasons. First, the dollar has continued to strengthen relative to the Japanese yen and the euro. That just means demand from U.S. consumers for foreign goods is getting marginally better every day. More and more U.S. dollars are going overseas, and investors know it. A little of that goes a long way, he feels. Second, most foreign markets are working with a slightly better economic situation than the one we currently have in the U.S. Interest rates still have a little higher to go, oil is still on the high end of its price range, and domestic inflation has only been minimally contained. He doesn't view that as a negative for U.S. stocks, but it wasn't exactly a positive either. Brumley just saw better relative strength overseas, and took action.
What about now? Brumley says "Actually, we've rearranged the model portfolio slightly, in light of current data. We thought it was prudent to go ahead and lock in some profits, plus we don't see the same kind of performance potential overseas anymore. We're still bullish on these stocks, but we want to bring some of that money back into this country now. We're closer to the end of the rate hikes, and the fact that unemployment rates are starting to level off along with inflation and oil means investors will be a little more bold about buying domestic equities." He then added "but we still have a significant amount of overseas exposure."
The portfolio results can be verified through TimerTrac.com. TimerTrac is a third party monitor of advisors and market timers. The website compares the results the advisor claims against the results achieved as if TimerTrac was an actual client. Interested parties can view Bluegrass Portfolio Management's six-month results by going to this exact page on the TimerTrac web site. https://www.timertrac.com/private/medallion.asp?mlid={882CEB09-5648-4143-A381-73FAEE9C3F7F}
Guest users should select "Bluegrass Allocation Model" to view the verified comparisons. The sector allocation model is also available with that link.
* The model portfolio does not take into account management fees or trading expenses, if applicable. Such fees could reduce a client's actual results.
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Bluegrass Portfolio Management, LLC
Attn: James Brumley
1005 Richmond Rd.
2nd floor
Lexington, KY 40502
ph. ( 859 ) 321-2474
e-mail: info@bluegrassportfolio.com
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