Tactical Allocations

February Allocation: Markets are choppy right now. They are not sure whether things are going to continue doing well or are going to decline. Trade wars, government shutdowns, airport chaos, Venezuela, and high level government official indictments are all part of the current news stream and people seem unsure how to deal with all the information. My signals are saying to take risk off the table. The equity markets dropped a lot in December but they could drop by another 40% and still be within reasonable historic valuations. This months trades will bring the debt exposure up to 17% in the active portfolios. That is one trade away from a neutral 25% (the same as in the equal weighted fund). Updated Allocations: Large Cap Equity (VONE):     83%   Small Cap Equity (VTWO):      0%   High Yield Debt (JNK):              0%    Inv. Grade Debt (AGG):           17...

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 as of December 31st (in order):   AGG(0.1%),  JNK (-3.3%) ,   VONE (-4.8%) ,  VTWO (-11.1%)   . TA:   Position taken one year ago:  VONE Rank:   3rd History 1st 2nd 3rd 4th Number of Bets:   2  5  1  0  % of Bets:   25%  63%   12%  0 % Enhanced:  Position taken one year ago:  JXI (2.3%) Rank :  +  Positive History     +   =   - Number of Bets:     3   1   4 % of Bets:   38%  12%  50% PORTFOLIO UPDATE (as of 1/25/2019): Current Performance: The ETF's and other funds that make up the portfolio's MTD Returns: Ticker 1/25/19 VONE 6.5% VTWO 10.2% JNK 4.3% AGG 0.2% DBCMX 4.5% IEMG 7.5% KXI 2.5% JXI GOVT 2.9% 0.5% Co lor sig...

Financial news sources create a smoke and mirror effect that is detrimental to prudent investing. ~ Bryan Baggenstos  The financial news loves to sound smart. They report on recent performance and then write stories about why that performance happened. It is important to note the order mentioned above. First they look at what happened and then they create a story about why it happened. Hindsight is alway 20/20. The linkage of the stories with the returns are fictional. They are not why prices moved. Prices move for one reason and only one reason. More people want to buy than sell or vice versa, sometimes news may influence buying decisions but only when it is major news. There are good and bad things that happen every day - the financial news emphasizes the good things on days when the market goes up and the bad things on the days when it goes down. Why is this important? This is what causes the smoke and mirror effect. Smoke because, like smoke, it limits your visibil...

Peer Relative Performance  in the fourth quarter was not great. Markets fell and my tactical portfolio's were relatively aggressive. The following is a review of all of the  Morningstar  monitored tactical asset allocation funds relative to my three funds. Return percentiles as of December 31, 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              39%              82%           -na-      -na-      TA              14%              82 %           -na-      -na- ...

Performance in December was poor for all risky investments. Trade wars, Brexit, Government shutdown, and many other negative news items held the focus of investors and hurt market sentiment.  What was not broadly discussed was the strong retail sales of this holiday season. Most economic leading indicators remain positive.  While the TA portfolio suffered the most in December, its inception to date return is still by far the strongest. The enhanced fund has been more conservatively invested and that is showing in the last three months worth of returns, however missing out on the strong returns early in this year and last year is what is driving its poor inception to date performance.  Cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog. DISCLAIMER: Past performance is not a guarantee of future performance.  This strategy is presented for informational purposes only and ...

Trades made within the portfolio's on January 2nd followed by a listing of the holdings in each portfolio. Equal Weight Portfolio: Cash balance on December 31st = $1,500.88 Bought 7 shares of VTWO at $108.00, with $7 commission = $763.00 Bought 21 shares of JNK at $33.57, with $7 commission = $711.97 Cash after transactions = $25.91 TA Portfolio: Cash balance on November 1st = $602.82 Sell 78 shares of VONE at $114.69, with $7 commission = $8,938.82 Bought 89 shares of AGG at $106.53, with $7 commission = $9,488.17 Cash after transaction = $53.47 Enhanced TA Portfolio: Cash balance on November 1st = $908.94 Sold 165 shares of KXI at 45.80, with $7 commission = $7,550.00 Bought 340 shares of GOVT at $24.83, with $7 commission = $8,449.20 Cash after transaction = $9.74 The Portfolios as of 1/2/2019: Equal Weight Portfolio:   Cash = $25.91 VONE = 225 Shares VTWO = 234 Shares AGG = 244 Shares JNK = 737 Shares TA Portfolio: Cas...