Tactical Allocations

Happy Halloween Everyone! Monthly Portfolio Update: Although the markets seem scary right now (pun intended), there is no change to the tactical allocation for November but there are trades to be done as cash needs to be invested. Large Cap Equity (VONE):   100%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):             0%   The Equal portfolio:   I will use the cash that has built up in the account to buy more JNK and AGG in approximately equal dollar amounts to rebalance this portfolio. The TA portfolio:  I will use the cash that has built up in the account to buy more VONE as that is where 100% of the allocation currently resides.  The Enhanced portfolio:  The purchase I made one year ago was DSEEX .  I will sell half of that position and buy VONE as I continue to work on adjusting how I add value in this portfolio.   Disclaimer: Past performance is not a guarantee of future performa

MICE (Money, Ideology, Compromise/Coercion, Ego/Extortion) - a CIA acronym that highlights the main motivations for a person becoming a spy.  It is crucial for the CIA to understand the motivations of those who give them information. It is just as crucial for investors to understand the motivations of those who say they want to give them money. When you look at an investment opportunity, if you do not understand how the money flows and the motivation of everyone involved then you should not invest. This is not to say that you have to talk to all the people involved but you must be able to understand the structure and see why each person is willing to play their part. If you cannot see this then you should not invest. Lets go through a couple of generic examples: A public company ~ A public company has many stakeholders (people who are interested in how it runs its business). It is important to understand each and how they might influence the course of the company. It is also

September showed the defensiveness I have built into the enhanced strategy as it held up in a month when markets in general did very little. QUESTION:   How did the portfolios perform? Cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog. ANSWER:   September was a flat month for investments in general. Small cap equities (VTWO) lost money (a pull back after a long stretch of very good results) while large cap (VONE) had modest gains. High Yield bonds (JNK) performed ok while their higher quality counterparts (AGG) lost a little. Interest rates and not risk drove bond returns in September.   QUESTION:  What happened in the market that impacted portfolio returns? Equal Portfolio:   This portfolio is invested equally in each of four asset classes. In September it returned -0.5%. It is the baseline or benchmark against which I judge the other portfolios. TA portfolio:  This portfolio is cu

Monthly Portfolio Update: There, again, is no change to the tactical allocation for October:   Large Cap Equity (VONE):   100%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):             0%   The Equal portfolio:   There are no trades for this portfolio. The TA portfolio:  There will be no trades in this portfolio.  The Enhanced portfolio:  The purchase I made one year ago was JXI.  There will be no trades in this portfolio.   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. I own all of the securities suggested in all three portfolio's.    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