Tactical Allocations

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%  

Trades made within the portfolio's on May 1st followed by a listing of the current holdings in each portfolio. Equal Weight Portfolio: Cash balance on July 1st = $1,405.83 Bought 8 shares of JNK at $108.57 with $7 commission. Total cost $875.56 Bought 4 shares of AGG at $111.11 with $7 commission. Total cost $451.44 Ending cash balance of $78.83 TA Portfolio: Cash balance on July 1st = $1,163.14 Bought 10 shares of AGG at $111.11 with $7 commission. Total cost $1,118.10 Ending cash balance of $45.04 Enhanced TA Portfolio: Cash balance on July 1st = $392.91 No Trades The Portfolios as of 7/1/2019: Equal Weight Portfolio:   Cash = $78.83 VONE  = 225 Shares VTWO  = 234 Shares AGG  = 248 Shares JNK  = 254 Shares TA Portfolio: Cash = $45.04 VONE   = 775 Shares AGG  = 189 Shares Enhanced TA Portfolio: Cash = $372.19 VONE  = 454 Shares IEMG  = 158 Shares JXI  = 184 Shares DVY  = 172 Shares GOVT  =  659 Shares