The PRIAGroup.com Asset Models for January 2015 all had a positive return. This speaks well of the Relative Strength Asset Allocation process considering the market was down close to 3% in January.
Our best performing model was the High-Yield Model which returned over 4% in January. This was due to not High-Yield but the model allocating into safer bonds for January 2015.
In late December we sent an email to our members that Bonds may be a better choice for January 2015 even though some of the models called for stocks.
The models may still call for stocks based on relative performance, but looking at Seasonal Returns and our Stock Market Levels indicator it can provide some additional insight to weight more heavily towards Bonds and less towards Stocks. (Bond Seasonal Returns shown below, to see Stocks Seasonal Returns please login)
The Market Levels Indicator raised a Red Flag in late December showing that the stock market may start trending down, which in fact it did.
The Market Levels indicator is now reaching the Oversold Area which means the market may be bottoming out. Also consider that historical returns for February are typically flat. If the market sinks further March may provide a good rebound play into stocks since seasonally March-April are strong months for stocks.