The charts to watch in tech, gold and emerging market stocks as volatility persists
This is the most active start of the year in terms of tactical portfolio adjustments we’ve ever had at Inside Edge Capital with three separate reallocations. Our most recent was March 20, and we’ll be sharing our three most important adjustments that I think may help you navigate these very tricky and range-bound markets. If you’re a regular reader to this Tuesday column, you’ll recall I posted a bullish article citing market internals . We’ve become more cautious in light of recent events, and the rebalance I’ll take you through reflects this. We not only reserve the right to change our minds, we require it as an active portfolio management for astute individual investors. Portfolio adjustment 1: We re-deployed index hedges The Nasdaq-100 is sitting right on top of a vulnerable shelf of support that I feel could quite possibly give way under the weight of mass uncertainty of geopolitical events and the knock on effect of interest rates and Fed policy. A break of NDX-100 ~24,000 could yield a breakdown to the 2024/2025 pivot level of approximately 22,500 and below there our recently adapted defensive posture will only increase. Our two flagship equity portfolios consist of individual names that we deem to be best in class within the 11 sectors that make up the S & P 500 . Below I’ve included the total percentage allocation of each sector along with the recently deployed hedges. In the more conservative Strategic Income & Growth (SIG) portfolio, that holds only dividend paying equities, we reduced our holdings most notably in materials, financials and technology. With that capital, we put 2% in the short-term treasury ETF (BIL) and 5% in the inverse NASDAQ QQQ ETF (PSQ) . If the Nasdaq goes down 1%, this ETF will be up 1% on the day. It’s not meant to hedge the entire portfolio obviously, but we’re looking to smooth the volatility on drawdowns and hopefully earn a return that will increase our buying power with the next leg higher in equities. In the more aggressive portfolio, Tactical Alpha Growth (TAG), we’re looking for best in class growth stocks within the 11 sectors. While we did increase our exposure to technology by 3%, we did reduce materials, consumer discretionary, health care and financials. We deployed 4.5% of that to BIL and 10% to the hedges, specifically 5% to PSQ and 5% to a 2X leveraged ETF (QID) , for 10% total allocation to hedges. Adjustment 2: Reduced holdings in gold stocks You think based on the horrible events in the Middle East that risk aversion and flight from equities would drive safe haven purchases of gold, but that trade has already played out. Central banks have been major buyers of gold during this de-globalization dynamic happening, and then perhaps peak gold bullishness was reached during the escalation of the Iranian conflict. Since then and as a result of the conflict, the market is pricing in higher inflation and has taken the June rate cut off the table. A true drive of gold is the level of real interest rates. Real interest rates are the nominal yield on a fixed income product reduced by the level of expected inflation. If a bond is paying 4%, but your 4% yield is being eroded by 2% inflation, your effective yield is 2%. What’s occurred here is real inflation is going up as nominal rates on the 10-year treasury note are rising higher than expected inflation over the next 10 years. Basically what means is your real expected return on a fixed income investment increasing, which takes the shine off of gold. In orange you can see the spot gold price has taken a massive dive — after the impressive runup. Related to this selling pressure in gold is the strength in the dollar, which acts a safe haven currency in times of geopolitical conflict. In SIG we cut our 2.5% holding in Anglogold Ashanti PLC (AU) and our 2% holding Agnico Eagle Mines Ltd (AEM) . We’re still holding Wheaton Precious Metals (WPM) , Southern Copper (SCCO) and Steel Dynamics . In TAG we cut our 2% holding in Kinross Gold Corp (KGC) and reduced Pan American Silver (PAAS) from 2% to 1% Adjustment 3: Cut exposure in emerging markets Related to the dynamics of global risk aversion during times of global conflict or financial stress, the U.S. remains a recipient of safe haven flows. Emerging markets were very strong in 2025, and we saw a significant rotation away from the U.S. into Latin America and Asia, but the geopolitical dynamic has sent higher relative flow back to the U.S. Emerging markets are often highly leveraged and indebted with their debt priced in U.S. dollars. As the dollar rallies, which it has done with higher U.S. interest rates, the cost to service that debt increases. Also, many of these countries have to import oil, which is now 50% more expensive than it was last year. The S & P 500 EFT (SPY) / Emerging Markets ETF (EEM) weekly ratio chart dating back to 2014 shows a nice and simple parallel channel that was under threat of breaking down but the candlestick shows a close back above support in favor of U.S. equities relative to EEM. Since then the ratio is consolidating before what I think will be the next move higher possibly following a de-escalation of Middle Eastern tensions, at which time we’ll take those inverse hedges off and realign with the secular growth/artificial intelligence bull market. —Todd Gordon, Founder of Inside Edge Capital, LLC We offer active portfolio management and financial planning for retail investors, as well as regular market updates at www.InsideEdgeCapital.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
<
