Monthly asset timing system - October 2015

I now have everything in place to run this system. It is a monthly trading system, looking to invest in 5 different asset classes: shares, bonds, property, gold and commodities. I use a market timing model in order to lock in gains as they accumulate, and avoid catastrophic drops in prices! This system is rooted in the work of Mebane Faber and Mark Shipman. Here are my views of the asset classes today, which is the last trading day of October 2015:

Shares

I use an international investment trust to access this asset class. The monthly graph shows that the closing price this month is below the ma12, which is the average for the year. This tells me to be out of the market.

redlight

2015 10 30 Shares

 

 

 

 

 

Bonds

I use an investment trust that holds mostly bonds, some blue-chip shares and some gold, to give 'bond-like' performance. I always remain fully invested in this investment trust, because it is much less volatile than the other classes, and it is not worth entering and exiting the investment. The light is therefore always green, even if the graph is technically generating a sell signal.

green light 2

2015 10 30 Bond proxy

 

 

 

 

 

Property

My property chart generated a 'sell' signal last month, which has been reversed this month. Consequently I am now back in the property investment in my portfolio. This is very frustrating, but is the price that I pay for attempting to actively avoid a market fall. Emotionally its quite difficult to do the complete opposite trade to what I have just done the month before, but having a mechanical system like this enforces it.

green light 2

2015 10 30 Property

 

 

 

 

 

It is, of course, possible that last months sell signal is an early sign of the property market running out of steam and that this months rise may be a 'dead cat bounce' which turns into a crash in the months ahead....

Gold

Gold is quite a 'spikey' market, and I use the two-year moving average (the green line on the graph) on a monthly chart to make my buy/sell decision. As you can see, there is no 'buy' signal yet:

redlight

2015 10 30 Gold

 

 

 

 

 

Commodities

The investment trust that I use to invest in commodities is still generating a 'sell' signal. Interestingly, the price recently hit the lows that were descended to in 2008. The past couple of weeks have seen some rises in commodity prices, so a 'buy' signal may be generated before very long...

redlight

2015 10 30 Commodities

 

 

 

 

 

Summary

So that's it for this month: one new trade, buying property.

If you would like more information about this trading system, you might like to consider becoming a member of my website. This will give you access to more detailed  information about what I trade, when I trade it, and how I do it tax-free. There is also access to information about the asset rebalancing trading system that I also use. Have a great month, and I look forward to catching up with you at the end of November.

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