Editor Jeffrey Hirsch is repositioning his portfolio for seasonal strength with this bond fund buy. The fund has a current annual dividend yield of 2.13%, paid monthly.
Vanguard Total Bond Market Index Fund ETF Shares (BND)
from Stock Trader’s Almanac
Seasonality remains back to normal, and it appears from all our observations that it will continue to track historical patterns for the remainder of the year. April’s solid returns across the board led by S&P 500 (up 6.0%) and NASDAQ (up 6.3%) and new highs for DJIA, S&P 500 and NASDAQ capped off a banner Best Six Months. DJIA is up 28.5%, S&P 500 is up 28.8%, NASDAQ is up 29.1% and the Russell 2000 is up an amazing 49.2% since the close of October through today’s close.
We issued our Best Six Months MACD Seasonal Sell Signal last week on the close of April 22. From our November 5 Buy Signal DJIA gained 19.1% and S&P advanced 17.8%. The Sell Signal looks rather timely with the MACD crossover or negative histogram occurring well above the zero line. NASDAQ’s Best Eight Months ends June 1, so the running gains so far are 18.4% for NASDAQ and 38.3% for Russell 2000 as of today’s close. June 1 is the earliest NASDAQ’s Seasonal Sell can trigger.
Our portfolios are shifting to a more neutral stance until we get that NASDAQ Seasonal Sell Signal.
As you likely know, we don’t “Sell in May and go away.” We do sell some things, and we do buy some things for the Worst Six Months. Instead of selling in May, we prefer to “Reposition in May.” For the beginning of our Worst Six Months repositioning, we’ve suggested establishing half positions in Vanguard Total Bond Market (BND) with a Buy Limit of $85.65.
Jeffrey A. Hirsch, Stock Trader’s Almanac, stocktradersalmanac.com, 800-762-2974, April 29, 2021