Tactical Allocations

No Trades on Dec 2nd. The markets have been fluctuating for the past six months, one month indicators say to reduce risk the next they say to hold course. This has led to a slower than normal reduction in risk but it has benefited the portfolio returns.  This month we are showing to "hold the course" although I expect we will continue reducing risk in coming months. The Equal portfolio:   No trades. The TA portfolio:  No Trades. The Enhanced portfolio:   No Trades. Current Allocation: Large Cap Equity (VONE):     67%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           33%   Equal Weight Portfolio:   VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 264 Shares TA Portfolio: VONE   = 622 Shares AGG  = 372 Shares Enhanced TA Portfolio: VONE  = 378 Shares IEMG  = 158 Shares DVY  = 172 Shares AGG  = 96 Shares GOVT  =  1055 Shares Disclaim

No Trades on Nov 1st. The markets have been fluctuating for the past six months, one month indicators say to reduce risk the next they say to hold course. This has led to a slower than normal reduction in risk but it has benefited the portfolio returns.  This month we are back to "hold the course" although I expect we will continue reducing risk in coming months. The Equal portfolio:   No trades. The TA portfolio:  No Trades. The Enhanced portfolio:   No Trades. Current Allocation: Large Cap Equity (VONE):     67%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           33%   Equal Weight Portfolio:   VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 264 Shares TA Portfolio: VONE   = 622 Shares AGG  = 372 Shares Enhanced TA Portfolio: VONE  = 378 Shares IEMG  = 158 Shares DVY  = 172 Shares AGG  = 96 Shares GOVT  =  1055 Shares Disclaimer:

Trades made within the portfolio's on October 4th 2019 followed by a listing of the current holdings in each portfolio. Equal Weight Portfolio: Cash balance prior to trade $1,145.36 Bought 10 shares of JNK at $107.60 with no commission (There are now many options with $0 commision i.e. TD Ameritrade, Schwab, Robinhood). Total cost $1,076.00. Ending cash balance $69.36 TA Portfolio: Cash balance prior to trade $141.09 Sold 78 shares of  VONE  at $133.82 with $0.20 SEC Fee. Total proceeds $10,437.76. Bought 93 shares of  AGG  at $113.75 with $0 commission. Total cost $10,578.75. Ending cash balance of $0.10 Enhanced TA Portfolio: Cash balance prior to trade $361.35 Sold 76 shares of VONE at $133.82 with $0.20 SEC Fee. Total proceeds $10,170.12. Bought 396 shares of GOVT at $26.55 with $0 commission. Total cost $10,513.80. Ending cash balance of $17.67 The Portfolios as of 10/4/2019: Equal Weight Portfolio:   Cash = $69.36 VONE  = 225 Sh

In the third quarter we have continued to see prices increase, however the pace has slowed. In the TA portfolio , the decision to focus on large cap stocks was very beneficial in Q3.  VONE was up 0.98% while the small cap VTWO was down 2.61%.  Investment grade bonds were the top performer during the quarter returning 1.63%. Lower quality bonds JNK were down 0.18%. It is typical in the late cycle of an economic expansion for large cap stocks to continue performing while small cap show early signs of market stress. In the Enhanced portfolio ,  GOVT returned 1.96% which outperformed the AGG by 0.33.  DVY returned 2.4% which outperformed VONE by 1.42%. Both of these contributed to the Enhanced portfolios strong results. Emerging markets continued to suffer and IEMG lost 4.70% which trailed VONE by 5.68%. Right now the poor performance of small cap stocks and low quality bonds in recent months is a strong signal to increase safety in the portfolio. Statistics are moving ar

Market Undercurrents: There are some very disturbing things happening right now in the financial markets that are not getting a lot of press. Because of this and a substantial change in some of the metrics I look at in the past two days, I am going to increase the allocation to fixed income with a late trade again this month. First the Trades: The Equal portfolio:   The equal account has $1145.36 so I will buy JNK with that money. The TA portfolio:  I will sell 78 shares of VONE and buy as much AGG as I can. The Enhanced portfolio:   I will sell 76 shares of  VONE  and buy as much  GOVT  as I can. Now the Reason: The money markets are in distress but no one is talking about it.  Basically there is a shortage of cash which is showing itself in something called the "repo" market. In the repo market, borrowers seeking cash offer lenders collateral in the form of safe securities—frequently Treasury bonds—in exchange for a short-term loan. The term of t

No Trades on Oct 1st. The Equal portfolio:   No trades. The TA portfolio:  No Trades. The Enhanced portfolio:   No Trades. Current Allocation: Large Cap Equity (VONE):     75%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           25%   Equal Weight Portfolio:   VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 254 Shares TA Portfolio: VONE   = 700 Shares AGG  = 279 Shares Enhanced TA Portfolio: VONE  = 454 Shares IEMG  = 158 Shares DVY  = 172 Shares AGG  = 96 Shares GOVT  =  659 Shares 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,

No Trades on Sept 3rd. The Equal portfolio:   No trades. The TA portfolio:  No Trades. The Enhanced portfolio:   No Trades. Current Allocation: Large Cap Equity (VONE):     75%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           25%   Equal Weight Portfolio:   VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 254 Shares TA Portfolio: VONE   = 700 Shares AGG  = 279 Shares Enhanced TA Portfolio: VONE  = 454 Shares IEMG  = 158 Shares DVY  = 172 Shares AGG  = 96 Shares GOVT  =  659 Shares 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

There are certain attributes that a person can develop to help them in any activity.  To use a sports analogy there are certain muscles or body systems that are key for certain sports. You don't need endurance for weightlifting and you don't need incredible power for long distance running. So what are the skills or attributes needed to be a good investor?  I will list a number of them and will try to talk about one each month going forward. In my opinion the following attributes are key to becoming a successful investor. Curiosity, Patience, Humility, Conviction, and Discipline Humility: Humility is the toughest attribute to cultivate, as soon as you think you have it, that is when you lost it. From an investment perspective, the market is going to do what it is going to do and we have no control over it.  We sometimes think we are smarter than the market, maybe you think I believe I am smarter than the market because I am trying to beat it. Not so. The marke

Performance as of June 31st was:            July         1 Yr        3 Yrs      ITD    Equal           0.87%        4.55%         -na-     7.35%     TA           2.53%        7.52 %         -na-    13.23%    Enhanced           1.78%        4.92%         -na-     7.32%    Blog Basics: In this blog I share and discuss three portfolios. The first is a "buy and hold" strategy that does not ever change. I call this the  Equal  portfolio because it is made up of four equal parts allocated to different asset classes. It is 1/4 in Large Cap Equity (Ticker  VONE ), 1/4 in Small Cap Equity (Ticker  VTWO ), 1/4 in Investment Grade Bonds (Ticker  AGG ), and 1/4 in Junk Bonds (Ticker  JNK ).  The allocations never change. The only thing needed is to rebalance every so often as performance differences will cause the weights to get out of whack. The second portfolio is a "tactical" portfolio. It is tactical because it adjusts the weights to t

Trades made within the portfolio's on August 8th 2019 followed by a listing of the current holdings in each portfolio. Equal Weight Portfolio: No Trades TA Portfolio: Cash balance on Aug 7th = $92.67 Sold 75 shares of VONE at $134.53 with $7 commission. Total proceeds $10,082.75 Bought 90 shares of  AGG  at $112.48 with $7 commission. Total cost $10,130.20 Ending cash balance of $45.22 Enhanced TA Portfolio: Cash balance on Aug 7th = $744.83 Sold 184 shares of JXI at $55.00 with $7 commission. Total proceeds $10,113.00 Bought 96 shares of AGG at $112.48 with $7 commission. Total cost $10,805.08 Ending cash balance of $52.75 The Portfolios as of 8/8/2019: Equal Weight Portfolio:   Cash = $519.00 VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 254 Shares TA Portfolio: Cash = $45.22 VONE   = 700 Shares AGG  = 279 Shares Enhanced TA Portfolio: Cash = $52.75 VONE  = 454 Shares IEMG  = 158 Shares DVY  =

This is a bit unusual but... I did not make any trades on Thursday August 1st. The market then shifted enough to tip my model into saying I should move towards Investment Grade Debt on Monday August 5th.  So... I am going to make a trade tomorrow and call it my August trade.  The trade will be to reduce exposure to Large Cap Equity (VONE)  and increase exposure to Investment Grade Debt (AGG) . In the Enhanced portfolio I will sell  JXI  and buy AGG . This moves the two active portfolio's ( TA and Enhanced ) to being more conservative than the equal weighted portfolio for the first time since I started this blog.  Updated Allocations: Large Cap Equity (VONE):     75%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           25%   No Trades on Aug 1st (but I will do the following on Aug 8th). The Equal portfolio:   No trades. The TA portfolio:  Sell 75 shares of VONE and use the

My signals are saying  Large Cap Equity  again. So there will be no changes yet. I bought  JXI  a year ago and I want to keep that allocation so there will be no trades in the enhanced account this month either. Updated Allocations: Large Cap Equity (VONE):     83%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           17%   No Trades on Aug 1st. The Equal portfolio:   No trades. The TA portfolio:  No trades. The Enhanced portfolio:   No trades. 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 Februa

There are certain attributes that a person can develop to help them in any activity.  To use a sports analogy there are certain muscles or body systems that are key for certain sports. You don't need endurance for weightlifting and you don't need incredible power for long distance running. So what are the skills or attributes needed to be a good investor?  I will list a number of them and will try to talk about one each month going forward. In my opinion the following attributes are key to becoming a successful investor. Curiosity, Patience, Humility, Conviction, and Discipline Patience: Patience in investing is vital and also very difficult.  When things move both in good and bad directions it is very difficult to not react. Emotion is the enemy of patience. Knowing yourself and being in tune with your emotions is more important than any external stimulus or statistic.  Quantitative measures or hiring a professional is one way to take the emotion out of inve

Peer Relative Performance  in the second quarter was solid. Markets continued to rebound and my tactical portfolio's were relatively aggressive. The one year numbers are particularly good and have been steadily above 80th percentile. The following is a review of all of the  Morningstar  monitored tactical asset allocation funds relative to my three funds. Return percentiles as of June 30, 2019. The % tells where the fund ranks during that period (100% would be the top performing fund, 0% would be the bottom)              3 Mo              1 Yr             3 Yrs      5 Yrs     Equal              67%              83%           -na-      -na-      TA              88%              93 %           -na-      -na-      Enhanced              58%              83%           -na-      -na-        Universe Size and Returns: # of Funds     266     261 -na-       -na-     Max Return      9.80%     12.21% -na-              -na-         Equal TA Enhanced Min Return    3.0

Historic Track Record Report Card: A record of all of the completed positions I have taken in the TA and Enhanced portfolios. One year performance at month end for each month in the Second Quarter (Q2): April:  VONE (13.2%) ,   JNK (7.0%) ,   AGG(5.4%),  VTWO (4.5%)   May:  AGG(6.7%),  JNK (5.2%) ,   VONE (3.3%) ,  VTWO (-9.2%)   June:  VONE (9.9%) ,   JNK (8.4%) ,   AGG(7.7%),  VTWO (-3.6%)   TA:   Position taken one year ago: April:  VONE     Rank:   1st May: VONE     Rank:   3rd June: VONE       Rank: 1st History 1st 2nd 3rd 4th Number of Bets:    4  7   3  0  % of Bets:   29%  50%   21%  0 % Enhanced:  Position taken one year ago: April: KXI (2.3%)      Rank:   - Negative May:   VONE (3.3%) Rank: = Neutral June:   IEMG (0.7%) Rank: - Negative History     +   =   - Number of Bets:     3   3   8 % of Bets:   21%  21%  58%

The first half of they year has seen a great rebound after a very difficult 4th quarter of 2018.  In the short term there has been a lot of concern over the China trade war and protectionism eating into corporate profitability. However we also see our President doing everything he can to bolster the economy (even trying to fire the Federal Reserve Chair). I believe his view is that if the economy is strong, he will get re-elected. So I am bullish for at least a year or so. My signals are close to taking things more conservative but they are kind of hovering so I am not too concerned that they are going to change soon. Looking back at the last 12 months of performance the AGG is actually the best performer right now. Performance as of June 31st was:          3 Mo         1 Yr        3 Yrs      ITD    Equal           3.07%        5.64%         -na-     7.46%     TA           3.93%        8.93 %         -na-    12.75%    Enhanced           2.82%        5.63%