A better benchmark – the global market portfolio

Apologies for the light posting of late. I’ve been visiting with family down in south Florida the last 10 days or so enjoying some great catching up time, my niece’s high school graduation, and way to much good Cuban food. Priorities you know! In today’s quick post I want to touch on what ‘should’ be the benchmark portfolio for investors. There are a lot of strong opinions out there about on this topic but the basic gist for us here in the US is that our standard 60/40 portfolio benchmark is too US centric and does not accurate reflect the … Continue reading

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A comprehensive look at market timing

In this post I’ll summarize a recent and very comprehensive study on market timing. It is probably the most comprehensive and robust look at market timing yet. Market timing is one of the biggest potential problems and complaints with TAA portfolios as I highlighted recently. Everyone wants a definitive answer – does it work or doesn’t it? As you might expect, there is something in the results for everyone, the die hard buy and holders and the die hard market timers. For those interested in implementing TAA portfolios there are several surprising findings in the study that are very applicable to … Continue reading

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SWRs for different retirement lengths screencast

Time for screencast #3. In today’s screencast I cover how the 4% rule, or 4% safe withdrawal rate (SWR), changes for different retirement periods. I thought I had covered this topic in an old post but as turns out I had not. It’s an important topic to cover. This is the first screencast where I cover one of the basic issues with the 4% rule of thumb – that not every retirement period is 30 years. In the screencast I discuss how the SWR changes for shorter and longer retirement periods. I also start the discussion how it varies with … Continue reading

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The top 5 problems with tactical asset allocation portfolios

There is a lot of interest in Tactical Asset Allocation (TAA) portfolios these days. The big TAA models are the various versions of the IVY portfolios (GTAA5, GTAA13, GTAA AGG3/6) and the Antonacci GEM/GBM portfolios. See here for a recent comparison. There are many others. The promise of higher than equity-like returns with low risk and drawdowns would be appealing to any investor. But often an investor’s actual real world experience with TAA portfolios can be a lot different than what the historical backtests or what investors’ expectations would suggest. In this post I’m going to list what I think are … Continue reading

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How to implement the 4% rule screencast

Well, that was fast! I just finished the second Investing For A Living screencast. In this one I tackle ‘How to Implement the 4% rule’. After publishing the first screencast I quickly realized that there is still quite a bit of misunderstanding when it comes to actually implementing the 4% SWR rule. And I happened to have all the material right at hand. It is not, as many believe, simply taking 4% of your portfolio value every year. I did tackle this early on in the blog but a screencast is a much better platform to explain more complicated concepts. … Continue reading

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Introducing investing for a living screencasts

Today I’m introducing something new for Investing For A Living. Screencasts. I love writing the blog. I love doing the research that goes into the blog posts as well. But I realize it is for a small audience. Especially with some topics like quant investing. Over time I’ve received more and more requests to discuss a variety of basic and fundamental investment topics. After considering many of the options available I’ve settled on screencasts. It’s relatively easy for me to put together and gives me flexibility to go over many subjects. Also, the people I’ve discussed this with think the … Continue reading

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Tactical asset allocation – may 2015 update

Here are the tactical asset allocation updates for May 2015. All portfolio 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 back to invested this month, after only one month on cash signal. Yet more thrashing going on there. All other signals are the same from last month. Now for the more aggressive GTAA AGG3 and AGG6 portfolios. Some significant changes in the AGG3 and AGG6 portfolios for this month. For AGG3, 2 of the 3 holding changed this month. … Continue reading

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Quantitative investing: trending value system update

In today’s post I’ll update the Trending Value quant system. The primary difference Trending Value has in relation to the three other systems that I have updated (Utilities Value, Consumer Staples Value, and Enhanced Yield) is that it uses relative price momentum in addition to value to screen for stocks. I first discussed the system almost 2 years ago now. Let’s update the results and see how it has performed and what stocks the screen favors today. The trending value system combines the best of value and momentum. It first uses a composite value score (VC2), like in the utilities … Continue reading

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Quantitative investing: enhanced yield system update

Time to update quant system #3 in my series. See my previous two posts for the first two system updates (here and here). Today I’ll update the enhanced dividend yield system which I originally posted on almost 2 years ago. Let’s dive right in. The enhanced dividend yield strategy originally appeared in What Works On Wall Street. In its original form its is a bit complicated to implement with an unequal weighting of the individual holdings. In my modified approach I use an equal weighting of the top 25 stocks. The strategy basically screens for large profitable popular dividend paying … Continue reading

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Quant investing: utilities value system update

In today’s post I’ll update the second quant investing system, the utilities sector value system. In my last post I updated the consumer staples value system. The utilities sector value system can be used on it’s own or combined in a portfolio with the consumer staples system. Lets get right to it. The utilities value system is somewhat more complicated than the consumer staples value system. It uses a composite value metric as I discussed in the original post on the system. The composite value metric is the average of P/E, P/B, P/S, P/FCF, EV/EBITDA, and SHY. In that post … Continue reading

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