Moving Averages of the Ivy Portfolio & S&P 500: October 2025

Core Insights - The article provides an update on the performance of the S&P 500 and the Ivy Portfolio, highlighting that all five ETFs in the Ivy Portfolio remain in an "invest" position as of the end of October [5][7][14]. Ivy Portfolio Overview - The Ivy Portfolio is constructed using an asset allocation strategy similar to that of Harvard and Yale endowment funds, consisting of five ETFs that cover various asset classes [2]. - The strategy involves creating a diversified portfolio with equal weight across asset classes, calculating a 10-month moving average for each fund, and making buy/sell decisions based on whether the fund closes above or below this average [3]. Ivy Portfolio Performance - At the end of October, none of the five ETFs in the Ivy Portfolio closed below their 10-month or 12-month simple moving averages, indicating a continued "invest" position [5][7]. - The percentage above or below the moving average for each fund is tracked, with funds within 2% of the signal highlighted for potential position reversals [6]. S&P 500 Performance - The S&P 500 closed October with a monthly gain of 2.3%, marking the sixth consecutive month of gains, and closed 11.0% above its 10-month simple moving average [8][10]. - The index also closed 11.6% above its 12-month simple moving average, maintaining an "invest" position for six straight months [12]. Moving Averages Strategy - Utilizing a moving average strategy can effectively manage risks associated with bear markets, where holding the index is advised when it closes above the moving average and moving to cash when it closes below [9]. - The article illustrates that a 10- or 12-month simple moving average strategy would have allowed participation in most upside movements since 1995 while significantly reducing losses [10][15]. Psychological Factors - The article discusses the psychology behind momentum signals, noting that human behavior often leads to buying during market uptrends and selling during downturns, which can create cycles of buying and selling momentum [16]. Implementation Considerations - The moving average strategy is most effective when applied to specific investments rather than broad indices, as signals may differ due to factors like dividend reinvestment [17]. - The strategy is recommended for use in tax-advantaged accounts with low-cost brokerage services to maximize gains [18].