McClintock Sector BPI Portfolio Review: October 9, 2025 | ITA Asset Management

Faced with the high probability that US stocks are in for a correction, if not worse, how should an investor manage their portfolio? The decision is much easier for Sector BPI portfolios such as McClintock, Carson and Franklin because this investment model is designed to take advantage of market volatility. For retirees’ Asset Allocation portfolios, this decision is not so simple. If you’re young and still in savings mode, continue saving, diversifying, and dollar-cost averaging regardless of market fluctuations. I’ll define “young” as someone who has fifteen years or more to save and recover from a major downturn.

Why choose a time horizon of 15 years? a) It took fifteen years or more to recover from the Great Depression. b) It took fifteen years or a little longer to recover from the stagflation that existed in the 1970s. Inflation spiraled out of control in the late 1970s and early 1980s, until Fed Chairman Paul Volcker turned up the interest rate screws to get inflation under control.

The Schrodinger portfolio is a special case because it is managed by the Schwab computers and is known as a Robo Advisor portfolio. Schwab calls these computer-managed portfolios Intelligent Portfolios. We will probably see how intelligent they are in 2026. The Schrödinger is due for its next review later this month.

With the various Asset Allocation portfolios such as Bohr and Bethe, I reduce exposure to the S&P 500 (VOO) and increase the percentage in lower volatile asset classes, as well as exposure to Developed International Equities (VEA) and Emerging Markets (VWO). Check out the two links at the bottom of this blog post. Emerging markets are rapidly evolving towards global leadership. The main countries are known as BRICS. Ten countries now make up the BRICS, with Brazil, India and China as the main players.

“BRICS is an intergovernmental organization consisting of ten countries: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.”

McClintock Sector BPI Holdings

Where do we stand with McClintock’s portfolio holdings? Only one sector is held in the McClintock. When Health dropped into the 30% bullish zone, I almost broke the Sector BPI’s basic rule for buying when a sector drops to the 30% bullish level or lower. I missed an opportunity when Health jumped from the low 30s to an overbought position.

With the market at or near an all-time high, I’m investing excess cash in SHV rather than adding a few more shares of VOO. The interest rate for SHV recently fell to 4.36%.

SHV is a holding position until one or more sectors fall into the bullish zone of the oversold Bullish Percent Indicator (BPI) of 30% or lower. There is an abundance of blog material available within ITA explaining the Sector BPI investment model. This is a unique approach to investing. At least I haven’t found it anywhere else. If you have any questions or comments, please leave them in the comments section below.

McClintock performance data

Since late 2021, the McClintock has outperformed the AOR benchmark, but not the S&P 500 (SPY). Please note that this portfolio has not used the Sector BPI model throughout the period.

I just looked at how the McClintock portfolio has performed over the last two years that Sector BPI has been active. The McClintock returned 60.5% over this two-year period, while the S&P 500 returned 62.7%. Almost call it a dead heat.

McClintock Risk Ratios

Of critical importance is the continued growth of the Jensen Performance Index over the past year. Each of the four risk ratio measures improved over this period.

Should we see a correction (10% decline) or worse, it will be very interesting to see how the three mechanical Sector BPI portfolios perform.

More about the national debt

Even more about the national debt and national security

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