Portfolio, TAA Investing

IVY portfolio end of October signals

Today was the last trading day for the month of October 2012. Time to take a look at look at the month end closing prices for the ETFs that make up the IVY timing model and see if any actions need to be taken. Sorry for the delay in posting these but with the markets being closed the last 2 days many of the updates I monitor have come at the last minute.

As usual you can see the signals at world beta or my preferred source dshort. Below are the signals for the end of October 2012.

At the end of October one new signal triggered. DBC closed below its 10 month SMA thus triggering a move to cash for that part of the portfolio. This is what is known as a false signal in the model. DBC triggered a buy only two months ago and now has triggered a sell. This is nothing to be alarmed about and is part of how the model works. This effect is non optimal but is unavoidable and just part of implementing the model. Depending on your buy prices for DBC from the end of August signals this trade will generate about a 4% loss for these 2 months. Also, on a tax note you can use this loss in DBC as a short term loss on 2012 taxes. This is part of a tax harvesting strategy which I’ll discuss in more detail towards the end of the year.

On an up note for this month, the other trade that was triggered in August, long VEU, is doing well an up about 4% since that time.

For previous posts on the IVY timing model and its performance see here and here.

Full Disclaimer - Nothing on this site should ever be considered advice, research or the invitation to buy or sell securities. These are my personal opinions only.

Tagged , ,

About paul.novell@gmail.com

7 thoughts on “IVY portfolio end of October signals

  1. Paul:
    It’s quite obvious to even the casual observer that the election results are very troubling for Wall Street. Tonight, with the exception of IEF, the remaining ETFs in the Ivy Portfolio may be below the SMA very shortly. Which brings me to my question.

    What would you think of employing a “momentum” strategy if the end of the month triggers a sell signal by moving the funds into IEF, as long as it maintains a “hold” status? I’d appreciate your thoughts.

    On a personal note, my wife and I are in the process of planning for our retirement. Having been RVers for a long time we’re strongly considering a “full timers” lifestyle for a for years. We follow your wife, Nina’s, site and enjoy it immensely. In fact, it was through an RV website that I found “Investing for a living”

    As always, I look forward to your reply


    1. Hi Kevin,

      I don’t know the answer to your question. It breaks the rules of the IVY timing model so I don’t know what the results would be. But in general I don’t think the results would be very different. There have been studies done that show the percentage allocated to the type of bonds in the portfolio doesn’t make much difference over the longer term to safe withdrawal rates. So, whether the ‘cash’ portion of the portfolio is in a very short term ETF like SHY, or a bit longer term ETF, like IEF, doesn’t matter too much. Especially in this environment where the difference between SHY and IEF is not that big. Personally, I stick to the IVY model as is.

      There are all kinds of other momentum models, a few of which are discussed in the IVY portfolio book, which you could look into to ‘enhance’ returns.


      1. Paul:
        Thanks for the feedback. I have read the portion of the book that discusses the momentum model. I can’t say I fully understand it but I’m over weighted in the top three ETFs that have shown stronger returns this year.

        Personally, I chart the YTD returns at the end of every month and will use a rolling 9 month average moving forward. According to the book doing this does result in better returns. I’m just not sure I’m calculating the returns correctly. If you have any thoughts on over weighting I’d appreciate it.

        Thanks again for your time.


        1. Kevin,

          Personally just running the basic IVY model is enough for me. I don’t think the extra effort for the other variations is worth it given that I can devote that time to researching and choosing individual stocks for the rest of my portfolio which I think can give me even higher returns. But that’s just me.


Comments are closed.