Tactical Allocations

Monthly Portfolio Update: The new tactical allocation for November will be:   Large Cap Equity:   100%   Small Cap Equity:     0%   High Yield Debt:        0%    Inv. Grade Debt:        0%   Look for a re-cap of performance on December 1st. The Equal portfolio:  There will be no trades in this account in December. The cash balance at month end is $200.88.  Total market value of this fund is $106,521.10. 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 another reduction in Small Cap Equity (VTWO) and an increase in Large Cap Equity (VONE). The total market value of this portfolio at month end is $111,248.21. I will sell all remaining (76) shares of VTWO and purchase as much...

Many want it, few achieve it. Why?    This post is particularly important for those in their early twenties or younger because they still have lots of time, but it will help anyone looking for help on how to build their retirement nest egg. It may surprise you, but retiring early has little to do with how much you earn. Is It Really Possible? I am on track to retire at 52 (that is not many years away for me). It is two years later than my original goal but still well ahead of most. In this post I will outline a few things that I believe have been key in my making early retirement a reality. The Goal: Without a goal you will never make it. There is always something to do with your money. I don't care how much you make, there is always something you would like to spend that last dollar on. You also have to adjust your thinking from a retirement age to a retirement amount.  The amount is how much you need each year to live a fulfilled life. Obviously t...

MORNINGSTAR PEER RANKS: Often the most difficult test is to look at a fund against its peers. How does performance stack up against the other active managers who are trying to run a similar strategy? I went out to Morningstar and found a Tactical Allocation Peer group ( you can see it here ). These numbers will be more meaningful as my strategy gets a longer history and I can compare 1, 3 and eventually 5 year numbers. 1 Mo 3 Mo 1 Yr 3 Yrs 5 Yrs Equal   34%   43%   -na-   -na-   -na- TA   91%   92%   -na-   -na-   -na- Enhanced   39%   63%   -na-   -na-   -na- # of Funds   308   305   297    250    193 Max  5.45%  9.81% 31.41%  12.33% 12.08% Min -1.16% -1.49% -2.92% -11.66%  ...

PERFORMANCE: In October the  Equal weighted portfolio  returned   1.0%. This portfolio is my version of a buy and hold portfolio and I use it as my benchmark for the two portfolio's below.  The  TA portfolio  was the best performing portfolio and returned 2.5%. This portfolio invests in the same securities as the Equal weighted portfolio but actively allocates by adjusting how much is invested in each asset class. The  Enhanced portfolio  returned 1.2%. This portfolio uses the allocation of the TA portfolio and seeks to enhance those returns by buying funds that access the asset class in a different way. Monthly returns are volatile so below I show the cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog (assumes $7 cost per trade). COMMENTARY: Equal Portfolio:   This portfolio is invested about 25% in each of four asset classes (invest...

TRADES  (performed on November 1st) : Equal Weight Portfolio: Beginning cash $1260.32 Purchased 6 shares of AGG at $109.25 per share, $7 commission, total cost $662.50 Purchased 15 shares of JNK at $37.08 per share, $7 commission, total cost $563.20 Cash left over $34.62 TA Portfolio: Beginning cash $483.90 Sold 76 shares of VTWO at $118.995 per share, $7 commission, total proceeds $9,036.62 Purchased 79 shares of VONE at $118.30 per share, $7 commission, total cost $9,471.00 Cash left over $49.52 Enhanced TA Portfolio: Beginning cash $165.08 Sold 168 shares of IEMG at $56.081 per share, $7 commission, total proceeds $9,414.61 Purchased 604.7181 shares of DSEEX at $15.83 per share, $7 commission, total cost $9,579.69 Cash left over $0.00 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.  October...