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 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