Category Archives: Portfolio

Comparing portfolio performance (1973 to 2015)

I’ve finally managed to gather enough portfolio performance data to out together this year’s portfolio comparison edition. I was able to add 2014 and 2015 data. Last year’s post is here. You can use last year’s post and the Portfolios page for portfolio definitions. I’ll present the comparison of the portfolios in a few ways. I also added a few new fields this year. I added the last 3 yr, 5 yr, and 10 yr performance for each portfolio and performance in the last bull market and last bull/bear market cycle. Now, on to the data. First, lets present the … Continue reading

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Tactical asset allocation – january 2016 update

Happy New Year everyone! Time to start fresh again in 2016. Here is the first tactical asset allocation update for 2016. As I mentioned last month, I am now using a new data source for the portfolio updates and also going to use a slightly different format for these monthly updates. I will also maintain the old portfolio formats, in Yahoo Finance, for a while. Here is the link to the Yahoo data. Lets dive right in. Below are the updates for the AGG3, AGG6, and GTAA13 portfolios. The source data can be found here. The big change here is … Continue reading

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Tactical asset allocation – october 2015 update

A lot of volatility this month in the equity markets. So far it looks like the portfolio signals to go to cash have been valid. Of course, that’s only half the battle. We’ll see what October brings, a historically positive month for equities. Here are the tactical asset allocation updates for October 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. GTAA5 is now 20% invested with IEF going to invested this month. For the timing version of the Permanent Portfolio there were no changes this month. Now for … Continue reading

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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. Lets look at how bad and expensive this unhealthy obsession can be. First, lets look at the case of the investor building future wealth. In a world where … Continue reading

Posted in Portfolio, Retirement | Tagged , , , , , , , , , | 10 Comments

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. When implementing buy and hold portfolios with ETFs the predominant concern is the management fee of the ETF, especially with an infrequent rebalancing approach. For example, with an annual rebalancing methodology at most there would be one trade per ETF per year. Other common trading concerns such … Continue reading

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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. Also, I have uploaded a spreadsheet to Google Drive that has more info on the data sources I used for the portfolios. Quant TV … Continue reading

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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. Definitely a little thrashing going on there. All other signals are the same from last month. Now for the more aggressive GTAA AGG3 and AGG6 portfolios. There were no changes for the AGG3 portfolios and only one change for the … Continue reading

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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. In this post I plan to be much more helpful in providing guidance for investors either looking to get started or for investors looking for a better approach to building investment portfolios than what they are using now. For this post I will rely heavily on a new book … Continue reading

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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. In this post I’m going to present some historical data that really brings this question to light. Then I’ll point you to some pretty amazing, yet complex research on this topic. The results may just lead you to give up any stock picking whatsoever … Continue reading

Posted in Portfolio, Quant Investing, TAA Investing | Tagged , , , , , , , | 22 Comments

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. This represents quite a challenge when looking forward and trying to model probable future outcomes for different portfolios. In the context of retirement this fact makes determining SWRs for modern portfolios difficult. The worst case historical 30 … Continue reading

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