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The model portfolio was made public in July 2025. It has 5 main components: stocks, bonds, cash, real assets, and alternative assets. Last month’s performance has been:
After the market’s meteoric rise over April and May, it is in a sideways corrective process for most of June and July. In the first few days of August, the S&P500 has broken out to new highs. Since then, the market has gone sideways once again.
The past month featured three articles about the forming record El Niño, Midterm election years, and data center electricity use.
Overall investor positioning is dangerously bullish and greedy, with near record levels of margin debt and extreme valuations. Midterm election years tend to be weaker into elections, which may be reason to be cautious this coming two months.
The Gray Area portfolio is up a healthy 7.68% year to date with lower risk than the S&P 500 (Sharp 1.78 vs 1.01, Sortino 2.23 vs 1.36, max drawdown 4.41% vs 6.5%, and 79% positive vs 58%). The portfolio also has higher nominal returns since inception.
This model portfolio is reasonably priced for paid members, with free subscribers still receiving three themed research articles each month. Consider upgrading to get up-to-date portfolio changes, allocation decisions, technical analysis, and synthesis of all the research pieces into an actionable plan. To beat the market, reduce risk, and know how not to get destroyed in a bear market, please consider joining with a premium subscription.
I will continue to provide a preview of two interesting positions within the portfolio.
Natural Gas Companies (FCG) - 6%
We bought into energy before the Iran conflict began, showing the power of technical analysis and understanding macroeconomic conditions. Be careful with any short-term energy trading, as oil seems heavily manipulated. Energy looks like a good buy overall, with or without the Middle East conflict as a catalyst.
Last month, we noted its support level at $26; FCG has now had two positive months in a row, up 18% off the July 1st low. This portfolio position is up 28.2% total, with target zone 1 an ideal price for rebalancing. FCG looks to be in an uptrend after a long multi-year consolidation process since 2022. The target level is $36-40. I can’t ignore the possibility of a larger correction into the green box ($15-19), which would likely coincide with a strong recession. Nonetheless, my long-term outlook is bullish.
Uranium Miners (URNM) - 2.5%
The idea behind uranium is that it will be an important aspect of our energy future, and real assets should offer true diversification from both the S&P500 and bonds. Over the course of the year, we strategically reduced the position and booked gains.
Here’s where things get really interesting. Last update, Uranium was in a solid downtrend. The recent move in metals appears like a breakout to the upside out of the downtrend with positive divergence in momentum. For this immediately bullish green scenario to play out, URNM must hold $47, and ideally $50.56.
I said we will get a better entry with a change in trend or lower prices. If we hold that support and turn up, it is a good sign and time to add. Otherwise, the grey support box at $34-41 will provide an even better entry. Our position is up 19.3% despite the recent selling pressure.
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