Fed Rate Week — Human Override Likely

This week, the Federal Reserve is set to release a decision on rate hikes on Wednesday. At the same time, it appears that the signal has reset enough during last week's whipsaw lower to potentially signal another leveraged episode starting Tuesday.

For this exact scenario, the model allows for a "human override" which I plan to execute if the signal calls for leverage on Tuesday. The reasoning is simple, and reflects on the stated goal of the ROQ portfolio method: outperform the market by being fully invested in market indexes with selected times of leverage.

So far, the ROQ research portfolio is outperforming the S&P 500 by approximately 8 percentage points year to date, with a similar risk profile to the index itself. We could simply peg to the market indexes the rest of this year and claim victory. So, levering up the portfolio the day before a major risk event doesn't make much sense to me. If, on Thursday, the conditions are still sufficient for leverage, I'll let the model go as it is designed to do. Otherwise, we'll stay in an unleveraged position until there's a little more clarity from the Fed.

Market analysis and this blog post were conducted and written with the assistance of AI analysis under human oversight.

The information provided here is for educational and informational purposes only and should not be considered financial advice. I am not a licensed financial advisor, and my portfolio may not be appropriate for your financial goals or risk tolerance. All investments involve risk, including the potential loss of principal. Historical data and market models are not indicative of future results. Past performance is not indicative of future results. Please consult with a licensed financial professional before making any investment decisions.