Tactical Allocations

Investing can be compared to a relationship. It is not a casual, short term relationship but a serious long term commitment.  It needs to be well thought out and one needs to have conviction and staying power in order to make it work.     Right now stocks have been on a very long, positive run. This is when most people get interested in investing and this is often the worst time to get started investing. My portfolio is not saying to take risk off yet, but the next change will be to take risk off, it is also not adding risk. Of the four asset classes I have chosen to allocate between, Large Cap Equity is the second safest or most conservative asset class. Only Investment Grade Bonds are more conservative. Investing is difficult because of time and how the recent past affects our current mood. A real world example to help you understand the difficulty: On 11/16/2015 you look at stock A (graph below). It has been going up and looks and feels like a good purchase. ...

October was a scary month, and yet the portfolio's did pretty well. I am particularly excited about the TA portfolio's 1 year return.  It is now higher than any of the Morningstar followed managers.  See below for more details. 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:  October was a a "risk off" month.  Assets that are considered risky, such as equity, did very poorly. Assets that are very safe, such as high quality debt, did less poorly. For a recap of the differences between each of the three portfolios go here .   QUESTION:  What happened in the market that impacted portfolio returns? The Federal Reserve announced that they would be raising interest rates faster than they had previously indicated. A raising of interest rates means that borrowing money is more expensive and generally slows down th...

Equal Weight Portfolio: Cash balance on November 1st = $787.63 Bought 3 shares of AGG at $104.35, with $7 commission = $320.05 Bought 13 shares of JNK at $35.11, with $7 commission = $463.43 Cash after transactions = $4.15 TA Portfolio: Cash balance on November 1st = $1,155.53 Buy 9 shares of VONE at $125.10, with $7 commission = $1,132.90 Cash after transaction = $22.63 Enhanced TA Portfolio: Cash balance on November 1st = $302.94 Sold $9160 of DSEEX, with $7 commission = $9,153.00 Bought 75 shares of VONE at $125.10, with $7 commission = $9,389.50 Cash after transaction = $66.44 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 ...