Tactical Allocations

Monthly Portfolio Update: The new tactical allocation for September will be:   Large Cap Equity:    75%   Small Cap Equity:    25%   High Yield Debt:       0%    Inv. Grade Debt:       0%   Look for a re-cap of performance on September 1st. The Equal portfolio:  There are no changes to the equal portfolio. The cash balance at month end is $727.11, total market value is $102,021.92. I will only rebalance when weightings get off by 5% or more (i.e. one of the asset classes has less than a 20% or more than a 30% weighting) or the cash balance hits $1000. The TA portfolio:  The change from the previous month is a reduction in Small Cap Equity (VTWO) and an increase in Large Cap Equity (VONE). This makes the portfolio a little more defensive, however it is still 100% in equities and therefore very bullish. I am adjusting the way I calculate what to sell this month. Inst...

"Compound interest is the most powerful force in the universe"   ~ Albert Einstein Procrastination is a basic trait of human nature that I think most people struggle to overcome. When it comes to savings, procrastination has a much higher cost than we understand because we do not fully understand the power of compound interest.  I like to use examples as it is easier to think in terms of real numbers. For a 20 year old, retirement is a long way off. At this age finances are tight, we do not have much spare money. We also have lots of expenses and needs as we begin paying for higher education and our own transportation and within a few years a home and kids. It is easy to understand why very few start saving for retirement when they are very young but... The true cost of procrastinating can be many times the amount we set aside! The chart below is the expected retirement savings balance of a 20 year old. It assumes they invest $10,000 per year and earn a 7% return...

PERFORMANCE: The  Equal weighted portfolio  returned 1.2% and is the baseline for the other portfolios.  The  TA portfolio  (which actively allocates among the four asset classes that are in the equal weighted portfolio) outperformed the equal weighted portfolio returning 1.9%.  The  Enhanced portfolio  (which uses the allocation of the TA portfolio and seeks to enhance those returns with security selection) did the best, returning 5.1%. The relevant security returns (used in the above three portfolio's) for the month of July (excluding dividends) were:  VTWO  0.8%,  IEMG  5.5%,  VONE  2.0%,  DSEUX  4.3%, KXI 0.7%,  JNK  0.5%,  AGG  0.1% Color significance for whole post:   Red  is small cap equity  Orange  is large cap equity Purple  is high yield debt Green  is investment grade debt ALLOCATION: Allocations during ...

TRADES  (performed in the morning on August 1st) : Equal Weight Portfolio: Beginning cash $564.75 No trade made because allocations were within acceptable range and cash was below $1000 TA Portfolio: Beginning cash $428.81 Sold 75 shares of VTWO at $113.71 per share, $7 commission, total proceeds $8,521.25 Purchased 78 shares of VONE at $113.49 per share, $7 commission, total cost $8859.22 Cash left over $90.84 Enhanced TA Portfolio: Beginning cash $549.15 Sold 163 shares of IEMG at $52.96 per share, $7 commission, total proceeds $8,625.48 Purchased 181 shares of JXI at $50.64 per share, $7 commission, total cost $9,172.84 Cash left over $1.79 I will post last months performance and the allocation adjusted for today's trades tomorrow. DISCLAIMER: Past performance is not a guarantee of future performance.  This strategy is presented for informational purposes only and is not a solicitation to buy or sell any securities....