A myopic focus on investment returns is bad for your wealth

Compounded annual returns are the crack of the investment world. Wall Street is the pusher and investors are the addicts. Investment companies and investors focus on the annual return metric as the most important in a portfolio to the long term detriment of most investors. This myopic focus on annual returns is bad for investors’ wealth wether they are in the wealth building phase or the withdrawal phase of their investment lives.… Read the rest

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Tips for trading ETFs in TAA portfolios

I get a lot of questions about the mechanics of buying and selling the ETFs that comprise the tactical asset allocation (TAA) portfolios that I discuss on the blog. In this post I’ll address some common concerns and issues with respect to ETFs and share some tips for trading them in TAA portfolios.… Read the rest

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When quant portfolios underperform

Any investment strategy that is not ‘the market’ will experience periods of under performance. Sometimes quite extended like value investing in the late 90s. How an investor handles those periods of underperformance goes a long way to determining whether they have any chance of outperforming the averages over time. In today’s post I want to highlight the recent under performance of one the best performing quant strategy from What Works on Wall Street.… Read the rest

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Comparing buy & hold, TAA, and quant portfolios

In my recent overview post on the landscape of available buy and hold portfolios, I said I would come back with a comparison of all the portfolio types; buy and hold, tactical asset allocation (TAA), and quant investing portfolios. Here is that comparison.

I’m pretty sure I’ve discussed all the portfolios I compare in this post on the blog at some point but here is a list of the portfolios and some links for more info.… Read the rest

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Tactical asset allocation – april 2015 update

That’s it for the month March. Here are the tactical asset allocation updates for April 2015. All portfolios updates are online as part of Paul’s GTAA 13 Portfolio New sheet.

First, for the basic portfolios – the GTAA5 and the Permanent Portfolio. Only one change in the GTAA5 portfolio. Foreign stocks (VEU) went to cash this month, after only one month on buy signal.… Read the rest

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Back to basics: diversified buy and hold portfolios

I often get asked “how do I get started with an investment portfolio?”. The best answer, but not very helpful, is to learn about building and investing in a diversified buy and hold portfolio for the long term. A very true statement but it usually leaves the investor still looking for answers.… Read the rest

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Asset allocation vs security selection

Nice to be back to posting. San Diego has been so full of fun, friends, family, and amazing local beer, that my blogging definitely suffered…

Is it even worth picking individual stocks? Even in quant portfolios? The more I delve into tactical asset allocation and it’s ease and benefits the more I’ve been asking myself this question.… Read the rest

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Tactical asset allocation – march 2015 update

Month number 2 for 2015 has come and gone. I’ll get right to the updates for this coming month, March 2015. Like last month I’ll continue with added commentary on the portfolio changes.

Starting with the most basic portfolios, below are the March updates for the GTAA5 and the Permanent Portfolio.… Read the rest

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Estimating worst case SWRs for modern portfolios

One of the challenges in dealing with modern portfolios like the Permanent Portfolio, the various IVY portfolios, Risk Parity portfolios, etc is the lack of long term historical data. Most of the modern portfolio data for a broad range of asset classes only goes back to 1973. The period from 1973 onward obviously only represents a subset of historical economic and financial conditions.… Read the rest

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Poor future returns and the safety first approach

In today’s post I want to address another approach to dealing with the prospect of poor future returns. In my last post I described the prospect of poor future returns and different risk-based portfolio strategies in such an environment. Today I’ll consider an alternative. The alternatives are various dedicated income approaches that put the retirement income stream at the top of the priority list.… Read the rest

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