Model Portfolio: February 2026

Risk management reduces volatility as new additions drive returns.

Feb 25, 2026

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The model portfolio started in March 2025, publicly tracking in July 2025. It has 5 main components: stocks, bonds, cash, precious metals, bitcoin, and a flex option. Based on macro risks and trends, last month’s construction has been: (see more details here). [Updated allocations at the end]

Stocks - MGC, XLP - 12%/5%
Treasury Bills - Vanguard 0-3 Month Treasury Bill ETF (VBIL) - 35%
Treasury Bonds - iShares 20+ Year Treasury Bond ETF (TLT) - 25%
Bitcoin - iShares Bitcoin Trust (IBIT) - 2.5%
Precious Metals - Metals Basket + Mining Companies (GLTR, GBUG) - 4%/6%
Flex - Sprott Uranium Miners ETF, Natural Gas ETF (URNM, FCG) - 7%/5%

Year to date, the portfolio is up 8.11% vs 0.46% for the SPX benchmark. Overall, we are up 36.6% vs 17.6% for the market. Over the last month, natural gas and consumer staples have been leading the charge.

The decisions to rebalance/trim precious metals and uranium last month were prudent in hindsight, as the momentum in these stocks waned. My last piece talks about the fundamental and technical picture for uranium and uranium mining companies. The uranium chart continues to look better than that of precious metals, thus the relatively higher allocation. If URNM wants to play ball, it has the potential to go over 100.

Further, the addition of FCG helped the portfolio continue to outperform the general market. It tested but was unable to break out over its 2022 highs this month. If it does, there is some upside potential. The first target is 42, and the next targets are 57-67 if it’s an impulsive 5-waves up. Oil/gas remains an unloved sector compared to the overvaluation of the standard market, as I discussed in a recent piece, No Love.

The precious metals rollercoaster continues. Silver was down 45% to 64 at one point, now at 87. I happen to be right about this one. Here’s a quote from last month’s article when silver was at 115.

Silver has tripled twice, in 1979 and 2011. Both times, the parabolic blow off top resulted in quick 30-50% corrections. New paradigm? I’ll take more profits and reduce the increasing risk. Of course, it can keep going up, but you could blink, and it’s back at $70. - January Update

My feeling is the correction in precious metals is not over yet. While we may come back towards 100 in the short term, a standard abc correction should target roughly 36 on silver (number subject to change until the current move up completes). I am keeping the current allocation for the time being.

The sector rotation from mega-cap growth stocks to safer stocks like consumer staples continued in February. Recognizing these sector rotation trends and shifting allocations is a common tool for active managers to drive portfolio returns. Before past recessions, XLP outperformed SPX by 30-60%, meaning there could be more room in this trade.

The mega-cap stocks have been relatively weak this month, but with no signs of breakdown in the labor market, passive flows should still be a heavy tailwind to the top stocks. The chart would fill out nicely with another push to new highs.

That being said, the SPX hit 7000 and fulfilled all the neccesssary elliot waves for the top to be in technically. This and the lack of labor market weakness are not enough evidence for me to further reduce stock allocation. We are in wait and see mode for the stock market to decide at this point. ~7100 would be a good target if it decides to continue higher.

Reducing bitcoin exposure was prudent as the bear market continues. Crypto winter seasonality continues. A standard abc correction targets 41,000-51,000, coinciding with heavy resistance around 49,000 as well.

TLT is starting to look interesting. Remember, bond prices are the opposite of bond yields. As the recession begins, growth and inflation will slow, causing bond yields to go down. TLT is a hedge for recession while paying you a yield. Every month, I mentionthat TLT is in a triangle pattern, which will eventually break out aggressively one way or the other.

Zooming in, TLT is attempting to break out to the upside (as we’d expect for a recession case). I labelled the chart so that there could be a leg 2 lower, which touches near the lower triangle line ~85. This doesn’t have to happen, as wave 2 in blue is already valid, meaning it could break out immediately. The portfolio’s TLT allocation is already high at 25%, so there is no need to add.

Summary:

I’m keeping everything the same. We have managed risk in stocks, metals, and uranium over the past months. The relatively small allocations hedge against prices going down. We have managed to outperform the market with over 50% in bonds. Next month, we may make moves in stocks, metals, and uranium depending on price movements.

The portfolio target allocation: