Tactical Allocations

Monthly Portfolio Update: There, again, is no change to the tactical allocation for July:   Large Cap Equity:   100%   Small Cap Equity:     0%   High Yield Debt:        0%    Inv. Grade Debt:        0%   The Equal portfolio:   There will be no trades in the equal weighted portfolio. The TA portfolio:  There will be no trades in this portfolio either.  The Enhanced portfolio:  I will sell out of the remaining DSEUX and will buy IEMG. Emerging markets have been hurt more than most areas as the worry of trade wars has escalated and I believe this is a decent time to re-introduce that exposure. I will sell all remaining DSEUX and buy as much IEMG as possible with the proceeds and cash on July 2, 2018.  I will post the trade details shortly thereafter. NOTE: This month I will be adding a couple of sections to my performance review which will allow me to consolidate a couple of the blogs I post at the beginning of the month.  Disclaimer: Past perf

With one year under my belt I am going to now introduce a new way of tracking the performance of my investment decisions. I will review each and every decision after it has played out.  The goal of these strategies is to make one bet each month and to hold that bet for one year. For the TA fund there are four choices (or asset classes that are possible choices). The Enhanced tries to beat that by using different funds to get similar exposure. Note: Going forward this and my Peer Review will be incorporated into my performance post. This will consolidate all of the performance related information into one post and reduce the number of posts I send out.   M AY ASSET CLASS RETURNS: Below is the performance of each of the 4 asset classes for the past 12 months (May 31, 2017 to May 31, 2018). They are ranked in descending order of return with the best return at the top.                                    Rank VTWO  21.0%          1st VONE   14.6%          2nd JNK        0.6%

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 3 and eventually 5 year numbers. This month is the first time I have one year numbers to show. As of May 31, 2018: 1 Mo 3 Mo 1 Yr 3 Yrs 5 Yrs Equal   87%   86%  73%   -na-   -na- TA   93%   64 %  97%   -na-   -na- Enhanced   23%   80%  59%   -na-   -na- # of Funds    308   301    289    239    179 Max    7.46%   6.64%  23.14%  10.55%  10.67% Min   -2.13%  -6.38%  -9.73% -12.49%   -9.59% COMMENTARY: It is great to finally have one year numbers and I am very happy with all of the 1 year results (they are all above 50%, meaning they all did better than the median manager. The TA fund

PERFORMANCE: Cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog. In May the  Equal weighted portfolio   returned 2.4%. 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  performed a little better, returning 2.6%. 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  had the worst results, returning 0.0%. 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

TRADES  (performed on June 1st) : Equal Weight Portfolio: Beginning cash $660.97 No trades TA Portfolio: Beginning cash $58.62 No Trades Enhanced TA Portfolio: Beginning cash $244.46 Sold 697.3321 shares of DSEUX at $10.87 per share (I put this order in to sell $7580 which is 1/2 of what I have left), $7 commission, total proceeds $7573.00 Purchased 62 shares of VONE at $125.86 per share, $7 commission, total cost $7810.32  Ending Cash $21.14 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