Tactical Allocations

Monthly Portfolio Update: There, again, is no change to the tactical allocation for July:   Large Cap Equity:   100%   Small Cap Equity:     0%   High Yield Debt:        0%    Inv. Grade Debt:        0%   The Equal portfolio:   There will be no trades in the equal weighted portfolio. The TA portfolio:  There will be no trades in this portfolio either.  The Enhanced portfolio:  I will sell out of the remaining DSEUX and will buy IEMG. Emerging markets have been hurt more than most areas as the worry of trade wars has escalated and I believe this is a decent time to re-introduce that exposure. I will sell all remaining DSEUX and buy as much IEMG as possible with the proceeds and cash on July 2, 2018.  I will post the trade details shortly thereafter. NOTE: This month I will be adding a couple of sections to my performance review whic...

With one year under my belt I am going to now introduce a new way of tracking the performance of my investment decisions. I will review each and every decision after it has played out.  The goal of these strategies is to make one bet each month and to hold that bet for one year. For the TA fund there are four choices (or asset classes that are possible choices). The Enhanced tries to beat that by using different funds to get similar exposure. Note: Going forward this and my Peer Review will be incorporated into my performance post. This will consolidate all of the performance related information into one post and reduce the number of posts I send out.   M AY ASSET CLASS RETURNS: Below is the performance of each of the 4 asset classes for the past 12 months (May 31, 2017 to May 31, 2018). They are ranked in descending order of return with the best return at the top.                             ...

MORNINGSTAR PEER RANKS: Often the most difficult test is to look at a fund against its peers. How does performance stack up against the other active managers who are trying to run a similar strategy? I went out to Morningstar and found a Tactical Allocation Peer group ( you can see it here ). These numbers will be more meaningful as my strategy gets a longer history and I can compare 3 and eventually 5 year numbers. This month is the first time I have one year numbers to show. As of May 31, 2018: 1 Mo 3 Mo 1 Yr 3 Yrs 5 Yrs Equal   87%   86%  73%   -na-   -na- TA   93%   64 %  97%   -na-   -na- Enhanced   23%   80%  59%   -na-   -na- # of Funds    308   301    289    239    179 Max    7.46%   6.64%  23.14%  10.55%  10.67% Min   -2.13%  -6.38%  -9.73% -12.49%   -9.59% COMMENTARY: It is great ...

PERFORMANCE: Cumulative returns of each of the strategies as though you had invested $100,000 in them at the beginning of the blog. In May the  Equal weighted portfolio   returned 2.4%. This portfolio is my version of a buy and hold portfolio and I use it as my benchmark for the two portfolio's below.  The  TA portfolio  performed a little better, returning 2.6%. This portfolio invests in the same securities as the Equal weighted portfolio but actively allocates by adjusting how much is invested in each asset class. The  Enhanced portfolio  had the worst results, returning 0.0%. This portfolio uses the allocation of the TA portfolio and seeks to enhance those returns by buying funds that access the asset class in a different way. COMMENTARY: Equal Portfolio:   This portfolio is invested about 25% in each of four asset classes ( investment grade debt ,  high yield debt ,  large cap equity ...

TRADES  (performed on June 1st) : Equal Weight Portfolio: Beginning cash $660.97 No trades TA Portfolio: Beginning cash $58.62 No Trades Enhanced TA Portfolio: Beginning cash $244.46 Sold 697.3321 shares of DSEUX at $10.87 per share (I put this order in to sell $7580 which is 1/2 of what I have left), $7 commission, total proceeds $7573.00 Purchased 62 shares of VONE at $125.86 per share, $7 commission, total cost $7810.32  Ending Cash $21.14 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 and February. ~ Mark Twain

Monthly Portfolio Update: There is no change to the tactical allocation for June (I hope you are not getting bored but investing is not about moving around unnecessarily, that would be expensive) ; The allocation remains:   Large Cap Equity:   100%   Small Cap Equity:     0%   High Yield Debt:        0%    Inv. Grade Debt:        0%   The Equal portfolio:   There will be no trades in the equal weighted portfolio. The TA portfolio:  There will be no trades in this portfolio either.  The Enhanced portfolio:  The portfolio has been active for a full year now. The original investment in DSEUX has not done well so I will sell out of one more section of that. I have been getting killed by my international exposure (the enhanced portfolio has not been very "enhanced").  I will reduce this bias by buying into VONE. I will sell 1/2 of the DSE...

It's what you choose to believe that makes you the person you are. ~   Karen Marie Moning Beliefs drive actions and actions build reputation. In the investment world, a correct set of beliefs are critical to generating above average results. The difficulty is that there are many false or misunderstood investment beliefs floating around - don't trust everything you read. Part of the problem is that an investment belief that works today, often will not work tomorrow. There is an odd dynamic in investing where the more popular an investment belief (or strategy) becomes, the less benefit it produces. This is a big part of why the investment world is so difficult to navigate. In this post I would like to share a core investment belief that has helped me develop the investment system I share in this blog. It is definitely not common or mainstream, so I am not worried that it will go away soon. The belief came when I ran a chart of the cumulative returns of the coupon ret...