Rate Dodging Cycle?

Here we are a month later, trying to dodge higher rates! Per last post, we were dubious on using the Fed's purported rates path as a reason for going longer on any one asset class over another. Boring, boring, boring...but, sticking to our TrueNorth methodology requires us to make only incremental shifts.

Given that equities continue to run, albeit dodgily, we are using the bounty of the last 3-4 years to liquidate prior-dated individual lots of most holdings. Our logic? Most of these holdings are up 50-100% ahead (going just by ETF returns), another 30% leg up, over the next year or two, would not dramatically improve the annualized rate of return on those lots, but a 30% down-leg would fritter away virtually all those gains. Let's not even talk about the additional holding period required to recover from that drop. Do you really want to give up your 30%+ gain in the first three lots in VTI, per the example below?

Post-sale, your overall market exposure should not be dramatically different from your "true north" with the lots you continue to hold. And the power of long-term asset allocation will likely continue to deliver. You decide!

Till next Monday....