Corona Virus – Managing Portfolio Risk

Well, I’ve been watching our portfolios and the US stock markets grind slowly higher. It’s been really nice. Now, I feel the time has come to take some profits off the table in SPY (S&P-500 ETF) and IYR (Cohen & Steers Realty Index ETF). Just these two positions have added approximately 2% to our total portfolio returns over the last month or two.

We are still very close to all-time highs in the US stock market, so you might ask me “Why are you doing this now? My answer is, “To be safe rather than sorry.” Yes, I know that we could miss out on further gains, but the markets seem to be ignoring the potential economic damage the quarantines and efforts to fight the virus could cause.

Since many of my clients are at or past retirement age, today, I sold all of the SPY position and half the IYR position. I will continue to watch the TLT (U.S. Treasuries ETF) and the GLD (Gold ETF) very carefully. Right now, they are both rallying strongly. If either of those asset classes shows weakness, then I’ll take profits there as well.

The “standard” very conservative portfolio allocations are still shown on the portfoliowisdom home page.