Tactical Allocations

Below are the trades made within the portfolio's on April 1st 2020 followed by a listing of the current holdings in each portfolio. Equal Weight Portfolio: Cash balance prior to trade $372.33 No trades TA Portfolio: Cash balance prior to trade $472.32 Sold 86 shares of  AGG  at $115.06 with $0.24 SEC Fee. Total proceeds $9,894.92 Bought 112 shares of  JNK  at $92.23 with $0 commission. Total cost $10,329.76 Ending cash balance of $37.48 Enhanced TA Portfolio: Cash balance prior to trade $942.91 Sold 320 shares of GOVT  at $28.14 with $0.23 SEC Fee. Total proceeds $9,004.57 Bought 2021 shares of HIX  at $4.92 with $0 commission. Total cost $9,943.32 Ending cash balance of $4.16 The Portfolios after the trades on 4/1/2020: Equal Weight Portfolio:   Cash = $372.33 VONE  = 225 Shares VTWO  = 247 Shares AGG  = 248 Shares JNK  = 264 Shares TA Portfolio: Cash = $37.48 VONE ...

Trades on April 1st: What a month! I have posted a couple of articles to help people in thinking about the incredibly fast drop in markets that happened in early March.  We have quickly moved to a place where it makes sense to begin adding risk again.  Usually this takes a few months but in this case we have gotten there in one. This is not me saying I think we have hit bottom.  I have done this long enough to know that calling the bottom is impossible. This is me saying that at the current prices, risk is well compensated and we should be adding risk to the portfolios. Note: The sells are 1/12th of the total portfolio. The Equal portfolio:   Beginning Cash $372.33 No trades The TA portfolio: Beginning Cash $472.32 Sell 86 shares of AGG Buy as much JNK as possible with proceeds and cash  The Enhanced portfolio: Beginning Cash $942.91  Sell 320 shares of GOVT Buy as much HIX as possible with proceeds and cash Current A...

We have seen historic moves in the markets this month. Volatility is back in spades. So how can we best weather the storm?  Is there a way we can benefit?  What should we learn for next time? These are the times when fortunes are made... and lost. Although we cannot change the past, where you started this downturn has a lot to do with what you are able to do now that we are in the middle of it. If your portfolio was 100% equity before the downturn: You are in a tough position. Nobody knows when this is going to turn.  It could start back up tomorrow or go down another 30%. What drives that is unknown (when will they have a vaccine, better treatments, better ways to stop the spread). Selling now is not prudent you are best off enduring the pain. What you can do is put new money into the markets. Look at what is down the most and try to increase the amounts you are putting into those investments. New money is your key to success and will be far more beneficial th...

Markets are down a huge amount in the past two weeks (about 20% for US Equities) - So what are we to do? S&P 500 recent price performance Lets look a bit at what drives short term movements in the markets and then we can figure out what to do. First of all: Fear and Greed drive market movements. When we are fearful of the future, prices go down and when we are greedy (or confident) they go up. Unfortunately following the herd is almost always the worst thing you can do. If you want to be successful you must lead the herd.   Secondly:  As much as they want you to believe the opposite, the news does not drive the market . The news reports what happened in the market. If markets are down, they do not focus on what went well that day, they focus on what might have caused the downturn. The opposite is true when markets go up.  The news causes up and down cycles to go farther than they otherwise would. Thirdly: When you are looking for returns in inve...

Trades made within the portfolio's on March 2nd 2020 followed by a listing of the current holdings in each portfolio.  The fact that the market is up today seems to support the idea that Bernie Sanders standing in the Democratic primaries were having an impact on markets last week in addition to Coronavirus. Equal Weight Portfolio: Cash balance prior to trade $1,566.63 Bought 13 shares of  VTWO  at $119.90 with no commission.  Total cost $1,558.70 Ending cash balance $7.93 TA Portfolio: Cash balance prior to trade $1,298.65 Sold 78 shares of  VONE  at $138.86 with $0.23 SEC Fee. Total proceeds $10,830.85 Bought 104 shares of  AGG  at $113.75 with $0 commission. Total cost $12,092.08 Ending cash balance of $37.42 Enhanced TA Portfolio: Cash balance prior to trade $974.83 Sold 86 shares of  DVY  at $94.175 with $0.23 SEC Fee. Total proceeds $8,098.82. Bought 78 shares of  AGG  at $116.27 with $0 commission. ...

Trades on March 2nd. Finally there is something interesting happening in the markets, unfortunately it is not good for society. Last week fear took over and markets went into free-fall.  While these movements are scary they are also the times when fortunes are made, and lost. Coronavirus is the main thing people were talking about last month but there was also the rise of Bernie Sanders in the Democratic primaries that also had an impact. Typically you want to buy when markets are down but it is too early for that. The earnings impact of quarantines and the markets worry about the election will continue throughout this year. It is time to take a bit more risk off the table. If this continues to play out we will be adding risk again soon. There is also a good amount of cash built up in the portfolio's and so that will be included in the trades and used to rebalance the equal portfolio. The Equal portfolio:   Beginning Cash $1,566.63 Buy as much VTWO as possible...

In 2019, the markets rebounded after a large selloff in Q4 of 2018.  Market strength has continued despite many concerned voices about high valuations. In the  TA portfolio , the decision to focus on large cap stocks was very beneficial in 2019.  Of the four options,  VONE  was the top performer gaining 31.12%. The small cap  VTWO  was next advancing 25.81%. Lower quality bonds  JNK  were up 14.88% and investment grade bonds AGG returned 8.46%. In the  Enhanced portfolio , we replaced AGG with  GOVT  which returned 7.36% and underperformed AGG  by 1.1%. A small portion of  VONE  was replaced with   DVY  and  IEMG  both of which detracted from returns.   DVY  returned 22.62% and  IEMG  returned 17.79%.  Both great returns but far behind  VONE . The earlier inversion of the yield curve, the high levels of corporate debt, and the euphoric rise and fal...