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Moving Averages: Month End Preview

Published 12/31/2014, 02:51 AM
Updated 07/09/2023, 06:31 AM
US500
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SPY
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DBC
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VEU
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Here is an advance preview of the monthly moving averages I track after the close of the last business day of the month. All three S&P 500 strategies are now signaling "invested", unchanged from last month. Two of the five of the Ivy Portfolio ETFs, the Vanguard FTSE All World ex-US ETF (ASX:VEU)) and the PowerShares DB Commodity Index Tracking (ARCA:DBC), are signalling "cash", also unchanged from last month.

Month-End Preview

Note: My inclusion of the S&P 500 Index updates is intended to illustrate a popular moving-average timing strategy. The index signals also give a general sense of how US equities are behaving. However, for followers of a moving average strategy, the general practice is to make buy/sell decisions on the signals for each specific investment, not based on a broad index. Even if you're investing in a fund that tracks the S&P 500 (e.g., Vanguard's VFINX or the SPY ETF) the moving average signals for the funds will occasionally differ from the underlying index because of dividend reinvestment, which is not factored into the index closes.

The Ivy Portfolio

The second of the three adjacent tables previews the 10-month SMA timing signals for the five asset classes highlighted in The Ivy Portfolio. I've also included (third table) the 12-month SMA timing signals for the Ivy ETFs in response to the many requests I've received to include this slightly longer time frame.

After the end-of-month market close, I'll update the monthly moving average feature with charts to illustrate.The bottom line, as I've pointed out earlier, is that these moving-average signals have a good track record for long-term gains while avoiding major losses. They're not fool-proof, but they essentially dodged the 2007-2009 bear and have captured significant gains since the initial buy signals after the March 2009 low.

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