Tactical Allocations

Monthly Portfolio Update: No change to the tactical allocation for January, it remains:   Large Cap Equity:   100%   Small Cap Equity:     0%   High Yield Debt:        0%    Inv. Grade Debt:        0%   Look for a re-cap of performance soon (lots going on with family so it might take an extra day or two to put it together). The Equal portfolio:  There will be no trades in this account in January. The TA portfolio:  There is no change from the previous month so no trade is needed for this portfolio. The Enhanced portfolio:  There is no change in allocation for this portfolio, however I am going to make a diversifying trade to reduce exposure to DSEUX. I am going to move that into a commodities investment. Commodities tend to do well in the late stages of the business cycle. I will sell about 8% of the DSEUX and buy as much DBCMX as possible with the proceeds and cash in the account. I will make the trade on February 1st and post the details shortl

  "Don't let schooling interfere with your education" ~ Mark Twain I have had quite a few people tell me that some of my early posts are too technical and are difficult to follow. After some reflection, I would like to try again. This time I will try to focus on the big picture of what I am doing. Hopefully this will give more clarity and understanding and alleviate confusion. I will start with what I believe is the key to good investing. Valuation: Value is what something is worth and investing is "betting" that the value will change in a way that makes you better off. My father challenged me to have a very difficult question in mind as I went through my collegiate education. This was to help keep me motivated on school and learning. My question was "What is the 'true value' of an asset?". What I learned is that the value of things change constantly and there is no "true value" to anything. Yet the whole goal of inv

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. As of November 30, 2017: 1 Mo 3 Mo 1 Yr 3 Yrs 5 Yrs Equal   9%   31%   -na-   -na-   -na- TA   41%   95%   -na-   -na-   -na- Enhanced   1%   11%   -na-   -na-   -na- # of Funds    312   311   302    249    190 Max  4.40%  10.41% 26.87%  12.07% 12.59% Min -2.13% -3.16% -5.68% -10.78%   -7.10% COMMENTARY: The TA fund has had a very good three months, although none of my strategies did very well over the one month period (even the equal weighted portfolio was outperformed by 91% of the strategies). The short term metrics can jump around a lot (all

PERFORMANCE: Cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog. In December the  Equal weighted portfolio  returned   0.4%. 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 1.1%. 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 -0.3%. 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. COMMENTARY: Equal Portfolio:   This portfolio is invested about 25% in each of four asset classes ( investment grade debt ,  high yield debt ,  large cap equity  and  small cap equity ). It is the baseline or benchmark against w

TRADES  (performed on January 2nd) : Equal Weight Portfolio: Beginning cash $734.94 No Trades TA Portfolio: Beginning cash $613.89 No Trades Enhanced TA Portfolio: Beginning cash $3643.69 Purchased 73 shares of JXI at $49.43 per share, $7 commission, total cost $3,615.39 Cash left over $28.30 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 is one of the peculiarly dangerous months to speculate in stocks in.  The others are July, January, September, April, November, May , March, June, December, August and February. ~ Mark Twain