About Me

My name is Paul Novell. I left the semiconductor industry, at 41, to pursue a more independent life.

This came after two attempts at “retiring early” (starting in January 2006) and being scared back into the work force for a few months. Since early 2010 I’ve been fully committed to the financially independent lifestyle. Since 2006 my main source of income is from my investments. I’ve been withdrawing from my portfolio every year since the beginning of 2006. Some call this early retirement. Not me. I’m not retired at all. I’m pursuing a financially independent lifestyle with investing as my main, but not only, funding source.

I launched this blog in 2010. My mission in this blog is to discuss all topics related to investing, living off your investment assets and making sure they last as long as you need them to last, as I personally live this experiment. My main focus is on quantitative and tactical asset allocation investment systems.

My back ground is in Electrical Engineering (M.S. and B.S) specializing in semiconductor physics. I also have a Masters in Investment Management from Hong Kong University of Science and Technology. My hobby has always been investing. I bought my first bond, IBM, at age 18. Over the last several years I have become primarily a quant investor – using systems and algorithms to make investment decisions.

In Sept 2017 I started writing an investment newsletter, the Economic Pulse Newsletter, a quantitative investment system based on economic indicators. You can find out more about it here. I also run a quant stock investing service which you can read about here.

For 8 years, my wife and I lived in our RV and traveled the US enjoying the sites and cities/towns in the US. My wife writes a blog of our RV travels which you can read here. In early 2018, we decided it was time for a change and we moved to France!

Now, we’re living in the SW of France.

149 Comments

Gene McKenna · October 8, 2010 at 4:51 pm

you guys are my heroes!

libertatemamo · October 8, 2010 at 5:20 pm

Thanks Gene.

David Fleischer · November 6, 2010 at 6:27 am

Love the photo. Is that your dog? A border collie? I am the part time owner of a border collie. My ex girlfriend and I got him together. Even though we split up, I have visitation rights and have him a couple nights a week, depending on my travel. Unfortunately, I still live in an apartment so having him full time is not feasible… she has a house with a yard…

libertatemamo · November 6, 2010 at 2:19 pm

Yep, that’s my dog. Or our dog I should day… 🙂 Yep, she is a border collie mix, I think she has some cattle dog in her too.

J Carroll · December 16, 2010 at 6:02 pm

Paul, I just found you on the internet today and have enjoyed reading your previous posts. Like you, I am retired, but a few years older (62). I especially enjoyed the post on options (11/15/10) which addressed your covered put strategy. I look forward to a post on covered calls.

libertatemamo · December 17, 2010 at 10:48 am

J, thanks for the comment. Options are a great retirement income strategy when used correctly and conservatively. I’ll work on that covered call post and will try to have it up by year end.

Dave Manning · December 30, 2010 at 8:19 am

Hey paul would love to catch up with you an nina we met you on the rv board lol but i too love to invest actually im always about the risk lol where in fl jacksonville i guess your wintering here ! it cold brr i would love to talk investments with you we do both currency and stocks Happy new year ! hey r u 2 on facebook ! oh an we travel with 16 paws !lol dave

libertatemamo · December 31, 2010 at 11:51 am

Hey Dave. Nice to hear from you. Happy New Year.

Susan T · January 30, 2011 at 12:49 pm

We just found the RV blog this morning and love it then notice the investment link, love it too! I always wanted my full time job to be managing my own money so I could live off my savings. We are very close, we are both retired, early 50’s, and ready to head out in our 40′ Blue Bird, one dog, two dogs, by April 2011. Just need to finish moving out of house. I look forward digging into your sites, thanks for posting them!

libertatemamo · January 30, 2011 at 12:54 pm

That’s great Susan. Best of luck moving out of the house. Its a bit nerve racking of a process but very cleansing. I hope you find some useful info to help you out on your investments.

Paul

Max · February 5, 2011 at 11:22 pm

Paul, you and Nina are living the dream. Every time I decide to retire I get pulled back into another “opportunity”. Between my last two companies, we did take our bus to Alaska for a three month vacation. Safe travels to you.

libertatemamo · February 6, 2011 at 11:41 am

Thanks Max. I was like you for two years. I first tried to retire at 40 then ended up doing 2 more ‘opportunities’, startups, before I finally called it quits two years later. It’s never an easy call but I’m glad I finally did it. Hey, I can always go back and go after all those great opportunities.

Best of luck to you.

Paul

achit patel · February 19, 2011 at 9:58 am

Paul,

Is it possible to access some older blog entries from late last year?
I was trying to show someone those articles but I can no longer access them
from the current Blog.

Nice work and best of luck to you.

Thanks,
Achit

libertatemamo · February 19, 2011 at 11:40 am

Achit, thanks for the comment. I added an archives section in the right hand margin of the blog. That should give you access to all the historical posts. Thanks for pointing that out to me.

Paul

Mark Sheingold · February 19, 2011 at 6:18 pm

Thanks for trying to educate us.

Good luck with your investments.

Out of curiosity, how much money do you think one needs to live off his investments, if he is skilled at investing.

libertatemamo · February 19, 2011 at 9:47 pm

Mark. I’ve written about that in the past. Check out this link; https://investingforaliving.us/?s=swr its the results of searching for ‘swr’ on my blog. SWR stands for safe withdrawal rate and it is the maximum amount you can withdraw from a portfolio annually and have it last through retirement.

The short answer is that 4% is a good rule of thumb to use for how much you can take out. That means that in order to retire you should have 25 times (1/4%) what you think you need your income to be in retirement. So, if you think you need $40K a year in retirement then you need to have $1M to retire.

Hope that helps. In some of the other posts I look at ways to enhance that 4% SWR through other methods.

Paul

Mark Sheingold · February 19, 2011 at 11:54 pm

Hi Paul,

Thanks for your link. I will read it, and if I have anymore questions, I will post again.

Thanks again.

Chris Ayoub · March 28, 2011 at 10:40 pm

Hi Paul,
I very much enjoyed reading some of your position pieces on investing for retirement. Having spent 23+ years running mutual funds for a Wall Street firm, I too decided it was time to give retirement a try and see if the grass is really greener on the other side. Also, my youngest was about to come into this world and, unlike my two older children, this time I wanted to be a bigger part of his day to day life.
Recently, my wife and I made the decision to get an RV and explore this beautiful country of ours, which is how I found your blog. Your wife gave me some good info on a place to stay near New Orleans and I noticed a link to your website. I would be interested in your opinion on the current state of economy and stock market valuations and the implications that corrective actions to the budget deficit and national debt levels will have on them. I worry that by forcing investors to seek out a reasonable return on their savings via stock investing, we could find ourselves in a corrective action that will make the last few bubbles look like minor events. I look forward to your future postings. Chris

libertatemamo · March 29, 2011 at 1:03 pm

Hey Chris. Glad to meet another Rver and fellow investor. The RV lifestyle is great. It grows and grows on you for sure.

Your questions would be great discussed in a dark smoky bar with several glasses of whiskey on the side…. In general, I don’t worry that much about the macro picture. That’s one of the big reasons I’m not an indexer. I try and keep my head down and focus on individual investments. I think I can invest profitably in most environments. Having said that I am a bit of a macro junkie on the side, more of a personal hobby, so the macro picture does tilt my view of investments. I think the world economy is soft but not as bad as most people think. I think the markets are overvalued but not too much and I think there is relative value in the US, particularly in large caps, versus foreign markets. I don’t like bonds except munis, the selloff has been overdone. I’m not too worried about all the political stuff going on. In the long term it will work out even if its really bumpy along the way. But bumpy is good to generate good returns if one is patient.

Maybe we’ll run into each other on the road somewhere.

Paul

Chris Ayoub · March 30, 2011 at 12:54 am

Hey Paul,
I like your approach to generate income via an option play in some of the less volatile large caps that offer a reasonable premium. My intermediate term view on the market is likely more pessimistic than yours but being in too much cash has been, and may likely for the near term, remain painful. Even though the trend has clearly been up, the presence of light volumes during this move up makes me wonder how bad the correction would be if, or when, the trend changes. Maybe it’s time to meet the trend halfway and take modest positions in a number of large cap dividend plays and/or the MLP’s and REITS. Any ones you particularly like? Thanks for your thoughts.

Chris

libertatemamo · March 30, 2011 at 12:09 pm

Chris, I’m always braced for a 50% correction in the short term. Yet another reason that I favor good dividend payers. MLPs in general are priced a bit above their historical averages but there are still some decent values I think; KMR, KMI, and ETP look ok here. My favorite MLP, EPD, seems a bit pricey although they are executing better than any other MLP right now so they may be worth it. I still like mortgage REITs, NLY and CIM, with the yield curve still so steep. In the normal dividend space I like NGG, MO. JNJ seems awful cheap although they can’t seem to get out of their own way. In large cap tech INTC and MSFT are very cheap too.

I agree with you that nothing seems super cheap except maybe large cap tech and some one offs like JNJ or MDT with current issues. Outside of my option trading I’m not taking any new long term positions, just continuing to reinvest dividends.

Hope that helps a bit.

Paul

Bruce J · May 19, 2011 at 3:03 pm

Thanks for the insight. After three years of trading and investing at work with positive results I finally gave up the job and am going to invest full time. I only have about 550k to invest and I would like to bring in closer to 20% a year on that. I realize I will have to be more active and take on a bit more risk then you do, but I think it can be done. I will be following you and your info for sure….again, thanks for taking the time to write this blog.

libertatemamo · May 19, 2011 at 7:37 pm

Sure thing Bruce. 20% is do-able. I use a portion of my portfolio to trade to generate income for living expenses. 20% is my return goal for that piece. A suggestion I would make is try to consider the 20% an average target. If the market is in a position where 10% is all it will give reasonably its not worth pressing. Usually its not too long before the environment changes and 30% returns are achievable. Best of luck.

Paul

Bruce J · May 20, 2011 at 4:27 am

Thanks Paul. Good advice….seems like right now the 10% is a good target. The MLP’s have taken a hit and if they get back going again 10% there shouldn’t be a problem. I picked a few up over the last week in an attempt to benefit from a rebound.

libertatemamo · May 20, 2011 at 7:57 am

Good move. I’m pretty heavily weighted in MLPs so I’m waiting for a steeper correction though I don’t think it will come, With 6% yields or so and 5% div growth, 10% is a slam dunk in this sector.

Paul

John Geeting · May 26, 2011 at 1:32 pm

Dude, you are living the dream! I need to get the kids off to college before I follow your lead.

libertatemamo · May 26, 2011 at 2:12 pm

Thanks John. Not having kids definitely helped, although it wasn’t by choice, When life throws you curves what are ya going to do?….learn how to hit curves…..

Best of luck.

Paul

jake · December 11, 2011 at 11:10 pm

Hi
To All Those Would Be Retirees:

I took an early retirement 7 years ago at age 45. I left the USA and decided to live in Thailand. I live off my dividends and ONLY my dividends. But, my overhead lifestyle is very modest, yet all my needs and wants are satisfied. I spend at least 3 hours a day in reseaching the market and often put in as many as 10 hours when I get “all wound up”. This is the best “job” I’ve ever had!

I recommend all who visit this site and are considering a retirement grounded in living off of dividends to not be scared from pursing their dream. It is certaintly intimidating for the aveage employee to go out on their own, but if you can keep your overhead low, and you find your own investing strategy/method that suits your personality, then all thats left is motivation.

By the way, when I retired, I wasnt even close to owning a million bucks (and still far from it) so dont listen to those who say you need ” X” amount in the bank before you can “drop out”.

And, great job on your site.
Jake

Bruce J · January 12, 2012 at 4:05 am

Do you disclose your holdings and if not maybe just your portfolio allocations? I love your goal of increasing net worth after all spending..simple and attainable. Thanks

libertatemamo · January 12, 2012 at 10:42 am

Hey Bruce. I do disclose holdings and allocation every once in a while. I don’t make it a habit. I don’t want to run a stock picking/trading blod. Ideally I want to show investors how to do things for themselves. You’ll see some more stock type posts in the near future.

Paul

Bruce · January 12, 2012 at 10:43 am

Thanks Paul. I agree with you. I would rather know how to fish then be given the fish!

douglas knight · January 19, 2012 at 9:49 am

Hi Paul: I just found your blog and share some of your investment interests (http://wp.me/P1LlDo-4h). However, my investment goal is a 30% CAGR with full understanding of the difficulty in acheiving that goal. My 5-year CAGR is -5.8% (compared to S&P500 TR -0.25%) due to bad trading behavior that I plan to correct.
Doug

libertatemamo · January 19, 2012 at 2:52 pm

Hey Doug, thanks for the comment. I like your self description of being an active senior investor. For my trading portfolio, which like yours is a percentage of my retirement assets, my annual BHAG (Big Hairy Audacious Goal) is 30% on my trades.

Paul

Eric Wubbena · April 12, 2012 at 3:33 pm

just found your blog! Love it! I am self employed and have 5 years until the kids are gone…my wife and I have set out to pursue a life that is similar to yours. Haven’t seen an updated post since Jan. Hope all is well.

libertatemamo · April 24, 2012 at 12:55 pm

Hey Eric. Yeah it’s been a while since I’ve blogged. Playing too much golf at the moment.

Paul

Deron D · April 23, 2012 at 11:35 am

Hello, Paul –

Just wondering if there is a way to connect with you privately via phone / email for a casual chit chat on investing for the long-term.

I work in the field as well and looking to connect with you to bounce some ideas, share thoughts, and explore possibilities.

Worst case, we each have new acquaintance in the field, no? 🙂

Thanks

libertatemamo · April 24, 2012 at 12:54 pm

Hey Deron. Sure thing.

Deron D · April 24, 2012 at 10:31 pm

Thanks, Paul! I’ll be connecting with you soon via email.

Bruce · April 24, 2012 at 1:22 pm

Paul. If you are ever in Houston texas give me a call and we can play a round of gf at my
Club in The Woodlands.

libertatemamo · April 24, 2012 at 6:05 pm

Thanks Bruce. That would be fun.

Del Clark · May 1, 2012 at 4:07 pm

Hi Paul,

I’m eager for your next post and i would like to learn more about your options money management strategy. Thanks!
Del

Malcolm · May 12, 2012 at 6:16 pm

Very interesting I have followed your RV travels for the past year. We spend 5 – 8 months each year in our 5th Wheel. Investments have always been left in the hands of a financial advisor. Your blog has raised my i.terest level. Thanks.

Mike Tritton · August 8, 2012 at 10:40 pm

Paul, I found your site two weeks ago and such is the quality of the material/commentary I’ve now got a small problem in that its keeping me up a night trying to get through it all 🙂 I have to say in the past I’ve paid money for material that doesn’t even come close to your content.

Many thanks!

/ Mike

libertatemamo · August 9, 2012 at 8:49 am

Hi Mike, thanks for the kind words.

Paul

Kerry · November 2, 2012 at 7:51 am

Thanks Paul for the great insight on the market and especially the Ivy portfolio. Curious……is any percentage variance in the SMA a sell/invest signal or do you set a minimum before you trigger a change in position?

libertatemamo · November 2, 2012 at 7:24 pm

Hi Kerry,

The buy or sell signals in the IVY timing portfolio are very specific. At the end of the month if the closing price is above the 10 month SMA, by any amount – even a $0.01, its a buy signal or a stay invested signal. And vice versa if the closing price is below the 10 month SMA.

Hope that answers your question. If not let me know.

Paul

Bryce Cannon · June 7, 2013 at 12:38 pm

Paul – I recently discovered your site researching information on the Ivy Portfolio (which I use to manage the retirement assets of my mother-in-law). You’re to be commended for sharing your insight with the rest of us. I was wondering if you had a spreadsheet/tool that you used (and wouldn’t mind sharing) that tracked SWR, CWR, investment performance, etc. She’s retiring at the end of the year and I’d like to have a tool to show her where she stands.

Thanks,
Bryce

libertatemamo · June 7, 2013 at 2:08 pm

Hi Bryce, Thanks. I have an excel sheet that could be useful I think. I need to simplify it a bit but it could help you start out.

Should I just email it to you?

Paul

Jeanne · July 9, 2013 at 1:28 pm

Hi Paul,

I am also interested in an investment tracking tool and would like to get a copy of what you are offering to Bruce. I’m exploring a few of the strategies you highlighted during the month of June. Thank you so much!

Jeanne

libertatemamo · July 12, 2013 at 9:57 am

Jeanne, its not an investment tracking tool. Its a simple spreadsheet that tracks retirement withdrawal rates. Let me know if you’re still interested.

Paul

Jeanne · July 12, 2013 at 11:00 am

Yes, that was my assumption. Xcel spreadsheets are great tools to use because of their simplicity and adaptability! Thanks so much. My email is 4jcallahan (at) gmail.com

mike bobal · July 6, 2013 at 11:34 am

I discovered your blog be reviewing full time rv sites. I have been practicing as similar approach to yours for the last 6 years.. I presently own a business but derive my living expenses from my option income. I plan on retiring in 5 years at 62.

It is good to see that someone has retired using this approach. It has enabled me to save my income generated from my business.We plan on full timing when we retire.

Looking forward to reading more from your blogs.

libertatemamo · July 9, 2013 at 9:44 am

Great to hear Mike. Full timing is a great life.

Best of luck.

Paul

daniel morton · April 10, 2014 at 2:01 am

Hi Paul, thanks for your blog. Have you backtested or seen anyone that has the AAG3 IVY portfolio back? I have seen several references using etfreplay but the 2008 results are far different than the book. I am trying to find an excel spreadsheet which reconciles to Faber’s paper here http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962461 page 52.

Thanks for any leads from Paul or your many followers.

Daniel

libertatemamo · May 10, 2014 at 5:44 pm

Daniel, yes, I’ve backtested the AGG3 to 1999 and have similar results to Meb’s. The results are not exact but they are close enough I think. I use Portfolio123.

Paul

BJedz (@Bjedz) · May 12, 2014 at 4:40 am

Paul, lots of great info here, thank you. I recently was tasked with the job of managing two different retirement accounts and i really like the IVY BH Income with 14 positions. Do I just divide the portfolio dollars i have by 14 and buy or do I divide and wait for the 200 day moving average signal to buy?

libertatemamo · May 12, 2014 at 10:49 am

Hi Bjedz. I assume you’re referring to this post. For your first question – No, the allocation to each ETF is listed in the table in the post, For example, DVY gets an allocation of 5%. You don’t just divide the money by 14. Second, I meant for this to be a buy and hold portfolio and not one for the moving average to be used on. While you can definitely do that, you lose some of the benefit of the increased yields of this portfolio. For your second question, if the MA signal for the ETF is on sell then yes you wait for a buy signal. If the MA signal is already on buy you would go ahead and buy the ETF. If you are worried about valuation for that ETF, you could wait for a sell, then a new buy signal before entering. Over the long run it won’t make much difference.

Paul

BJedz (@Bjedz) · May 13, 2014 at 2:52 pm

Great, thanks Paul, your blog has helped me tremendously. On a side note, that GTAA 3 looks very promising! 56% for an upside best and only a 4% worst year. That seems too good to be true. I did notice MTUM was thinly traded, is there a replacement for that?

libertatemamo · May 14, 2014 at 10:09 am

You can use a growth ETF to replace MTUM if you like although I think MTUM is well constructed. It is small and thinly traded so my concern is it will not be around for long.

Rodney Druschel · May 17, 2014 at 11:05 am

Paul – Hope this finds you well & enjoying life. I found your site just yesterday. About a year ago, you said you would most likely personally follow AGG3 & post the month end results. Have you done that &, if so, is the monthly data on the website? If you’re not using AGG3, where can I find the info on the Portfolio123 you refer to in May 10 post? Thanks for your continuing counsel for all us early retirees or those aspiring to do so !
Rod

libertatemamo · May 17, 2014 at 4:23 pm

Rodney, I keep a spreadsheet on Google Drive, accessible by anyone, that tracks the GTAA13, AGG6, and AGG3 portfolios. It updates every day automatically. You can find it here, https://docs.google.com/spreadsheet/ccc?key=0AsEFPmmM3-5YdF9XckN0Ry05Y28xcUlIY3loY1hGNUE&usp=drive_web#gid=1

Paul

Debbie Lees, TumbleLees · January 10, 2015 at 1:10 pm

Finally took a look at your blog. Amazing…I’m trying to grasp it!
Nina’s blog is easier to read and now I see how she gets away for her solo adventures! Lol!
Keep up the good work!

paul.novell@gmail.com · January 11, 2015 at 8:55 am

Thanks Debbie.

Pico · January 28, 2015 at 7:23 am

Paul, I was looking at your google shared drive data and did not see return data showing up? Am I missing something?

I do see 2014 for 3 and 6.

Did you have something that showed your 5YR return?

Thanks!

paul.novell@gmail.com · January 28, 2015 at 9:14 am

The return data through 2013 is here.

Paul

outwestbound · March 3, 2015 at 4:27 pm

Paul,

Thanks for sharing so much great info! Do you recommend any particular online trading platform?

Thanks

paul.novell@gmail.com · March 4, 2015 at 10:09 am

There are several good discount brokers out there. My personal choice is TD Ameritrade because I think they have a nice tradeoff between features and pricing. Many others use Schwab. I also know people who use Interactive Broker and are quite happy with them.

Paul

outwestbound · March 4, 2015 at 6:09 pm

Thanks Paul. I have some experience with TD, which acted as custodian on some managed stuff I’ve worked with. The manager gave me a client log on with limited access, but I liked TD. I was leaning that way. Thanks again.

Aprillynn Sanchez · March 14, 2015 at 11:08 pm

Hello,

My name is Aprillynn, I’m a 23 yr old Speech Teacher from South Texas with a newly found passion for investment banking. I’ve stumbled across your blog after stumbling across your full time RV-ing blog, which is simply delightful. After only coming across the travel blog because it’s a dream of mine to do exactly what you and your wife are accomplishing. I like to think of it as thriving. So I googled, as I usually do, “Full-time RV before retirement” and voila!
In hopes of decent retirement and financial freedom before 50 I have begun maxing out a Roth IRA and will move on to a brokerage account in the next 8-12 months. Also, looking to take on a little risk in real estate, purchasing a 4plex here at home. I have a financial advisor who is patient with me, haha, and always keeps me grounded. Now, I always like to do my research and take on different opinions, what would be my next step, in order to guarantee my plan of teaching for 9 more years, then being able to own 1-2 apartment complexes on top of living off of my investments?
Thank you for taking your time to entertain my thoughts and doubts.

Bright-eyed and inspired,
Aprillynn

paul.novell@gmail.com · March 15, 2015 at 2:04 pm

Aprillynn, well you’re well on your way to your goals by starting so early. A couple of things I would point out – your success will primarily be determined by how much you can save for the next 9 years and how little you can spend. 9 years of investing won’t do as mush as saving a ton and spending little. Not saying its not important, it’s just not that much time for compounding to make a huge difference. So, that’s where I would recommend to really focus. Take a look at Mr Money Moustache’s blog and community. I think you’ll find a lot of kindred spirits there.

On the investing side I’d recommend learning first about diversification, keeping fees down, and examples of the best buy and hold portfolios out there like the Permanent Portfolio. Once you’re comfortable with those then you can move on to the tactical asset allocation models that I discuss on the blog.

Paul

Gabriel Craft · April 6, 2015 at 4:10 pm

Thank you for living your lives intentionally. I am feeling empowered. Alek Lisefski of The Tiny Project brought me here. I offer you thanks from Ofunato, Japan. 🙂 ~Gabriel Craft

paul.novell@gmail.com · April 7, 2015 at 7:41 am

You’re welcome Gabriel.

Paul

Paul Wilhelmsen · May 22, 2015 at 4:02 pm

Hi Paul,

Really enjoy your blog. You are helping a lot of people, including me.

I am new to dividend investing but here is my question: How do you track the dividend side of the portfolio so year to date and year to year gains are accurately reflected.

Many thanks,

Paul

paul.novell@gmail.com · May 23, 2015 at 7:44 am

Thanks Paul. If you use dividend adjusted prices to calculate return, the prices already include the dividend paid, so your return will be a true total return which includes the dividend yield. Most tools these days report dividend adjusted prices by default.

Paul

david hilliard · May 30, 2015 at 10:51 am

I found your site by doing a search for 10 mo SMA. After seeing what you are doing I am curious if you follow any particular quants. It seems that many are or have in the last few year come to some of the same conclusions about index investing. There are some who are also adjusting their allocations by using some form of momentum. The jest of my question is really are those in the tactical allocation camp doing much the same thing. Meb Faber would be one example, are you familiar with his work. Thanks David

paul.novell@gmail.com · May 30, 2015 at 3:34 pm

Hi David,

If you read through my old posts you will see tons of references to the top quants and TAA guys out there. Faber, Antonacci, GestaltU, Alpha Architect, and O’Shaughnessy are my top go to sources. That is where all my model portfolios are derived from.

Paul

David Hilliard · May 31, 2015 at 10:31 am

Thanks for the reply. I am learning the value of this idea or method and your site has been very helpful. David

Bill Rouleau · August 4, 2015 at 7:38 am

Hi Paul –
New to your site and wanted to find the allocation percentages for the 13 portfolio that takes the top 3 asset classes. Instead of using the 13 portfolio’s “Buy and Hold” percentages, do I allocate 100% of my portfolio to only those top 3 asset classes each month?
Where can I find the “rules” for the various portfolios?

Have a beautiful day where ever you are!
Bill R – south FL

paul.novell@gmail.com · August 21, 2015 at 9:59 am

Yes, for the AGG portfolios you allocate 100% of the portfolio to the top 3 (AGG3) or top 6 (AGG6) asset classes.

Search the blog for IVY portfolio and you’ll find a bunch of posts where I discuss the rules. Like this one,
https://investingforaliving.us/2013/07/15/ivy-timing-model-extensions-weightings-momentum/

Paul

Graham · December 28, 2015 at 2:13 pm

Hi I really enjoy your site. I am just wondering where you get your data for asset backtests. I have found sources for a few of Faber’s assets back to 1970s but I cannot get foreign bonds or the Goldman commodities. Any tips?

Thanks for all your awesome content

paul.novell@gmail.com · January 4, 2016 at 9:24 am

For backtests from 1999 onward I use Portfolio123.com. For longer backtests I use the same public data that’s available to all; Faber, Shiller, etc… I have found MSCI has decent foreign data so try that. That is where I get my foreign stock data.

Paul

Richard Woods · January 1, 2016 at 9:08 am

Thanks for your great site. I am currently implementing the methods stated by Butler in “Adaptive Asset Allocation: A Primer 2015 Revision. But one of his rules is not clear. Perhaps you have some insight since you previously discussed the methods found in the original edition of the paper. When you select the top 5 funds and then want to use weights that yield minimum variance, what do you do when the number 5 fund has negative momentum? Do you only invest in the top 4 and compute the weights using only those 4 funds in the covar matrix?

paul.novell@gmail.com · January 4, 2016 at 9:36 am

Have to look back in the memory banks a bit, I can’t quite recall if the AAA strategy uses a cash filter. If it doesn’t then you would use the top 5 funds regardless of the positive/negative momentum.

Richard Wilkes · January 5, 2016 at 3:47 pm

I just ran across your site looking through places to RV. I intend to look more. I too spent some 25 years in the semiconductor industry building, maintaining and operating wafer fabs. After a few years with Boeing, I had enough. I’ve also been investing as a hobby and most recently red Fabers material and am using a similar model with Etfreplay for a moving average in/out signals. I found a 90day/9day cross works a bit best and am trying a week to it by using the simple 5 etf methods also with liquid options to do covered calls against. Using other option, long / short strategies to fill in the blanks where cash is involved. Mostly I want to do this while freeing up my wife from work and venture around while we still can. Thanks for the head start! Now what to buy Class A or 5th wheel and toad……..

paul.novell@gmail.com · January 7, 2016 at 10:59 am

You’re more than welcome.

gary · January 18, 2016 at 6:47 pm

Paul, is there a glossary of terms or list of acronyms in your blog that I can refer to? As a relative noob to the investment world, I’m at a loss when reading through your posts since I get hung up on the various abbreviations that I’m not familiar with. By way of intro, I’m a 72 year old retiree with no investment experience other than moving funds from one vehicle to another within the limited choices of my former employers 401K plan. Life was easy until 2 years ago when it was necessary to move my funds to an IRA. Since then, things have become considerably more challenging.

Gary

paul.novell@gmail.com · January 30, 2016 at 10:30 am

Hey Gary, yeah that is a huge change. And unfortunately I don’t have a glossary of terms. A blog doesn’t necessarily lend itself very easily to such a thing. I would recommend going through the ‘Portfolios’ page and reading through the historical post for each of the portfolios you are interested in.

Paul

Gan · February 10, 2016 at 1:42 pm

Paul, do you have your portfolios available as Motifs? If not, would you consider setting up Motif (http://motifinvesting.com) portfolios for AGG3 AGG6 and other TAA strategies?
That’ll make monthly adjustments automatic for those of us who follow your strategy. I believe Motif will also pay you back as more and more people follow your ETF basket.
Just a thought. Thanks for everything you do.
Regards,
Gan

paul.novell@gmail.com · March 1, 2016 at 7:45 am

No I don’t. I’ve thought about it but haven’t pulled the trigger yet.

Sal · March 20, 2016 at 8:10 am

Hi Paul, thank you for a very informative website. I’m sure this has already been addressed somewhere, but has anyone discussed modifying your Quant Trend Value approach for value ETFs, vs. value stocks? I saw your August 2013 post on going global with buying emerging markets stocks, why not sector and country ETFs with good valuations?

paul.novell@gmail.com · April 1, 2016 at 2:41 pm

Could work but the issue is getting value metrics for ETFs.

Paul

Alex · April 11, 2016 at 6:02 am

I’ve been following your blog for a while. We had planned to hit the road last year after selling our house in CA, but “another” opportunity came up in south florida so we are down here for a while..

I would like to ask if your models are on portfolio123? You clearly are passionate about what you do investment wise. Are you taking on any clients for fees? If so, I would consider having you manage a part of my portfolio.

Let me know if you are interested. We can meet locally to discuss if you wish.

Thanks

paul.novell@gmail.com · April 12, 2016 at 10:06 am

Alex, my models are not publicly available on P123. And I don’t manage money for clients. I have looked into both and may do both in the future but not for now.

Paul

Kevin Fillo · April 14, 2016 at 10:49 am

Hi Paul:

I am just getting started on my full time RV lifestyle and am impressed and motivated by what I’ve read here. I am 59 and a technology lawyer but will soon be relying on my investment portfolio as my principal source of income. Thanks for your insights and for the RV tips as well!

Best regards.

paul.novell@gmail.com · April 14, 2016 at 1:29 pm

Thanks for the kind words Kevin.

Victor · May 1, 2016 at 9:08 pm

Paul, here’s a link to a site that tracks a few of the “What works on wall street” quant portfolios. They note that the VC2 method was subsequently updated by the author (2 years later). Thought you might be interested.

https://beatthestockmarket.com/pages/portfolios/trending_value_stock_screen_what_works_on_wall_street.cfm

Cheers,

Victor

paul.novell@gmail.com · May 3, 2016 at 8:09 am

Thanks Victor. I’ll probably create a different version of VC2 and TV2 and also keep the originals.

Paul

Matt K · June 27, 2016 at 4:12 pm

Do you know anything more about this modified VC2? It seems to work better the last 3 years but before that back to 1999 the original VC2 is better. Here’s the article Victor mentioned: http://www.aaii.com/files/PDF/9040_what-works-key-new-findings-on-stock-selection.pdf

paul.novell@gmail.com · June 30, 2016 at 2:56 pm

Matt, I’ve tested it and I cannot even duplicate the better performance over the last 3 years. Even if it did perform better I would always stick with the longer dataset. I’m keeping an eye on this but I’m sticking with the original VC2.

Paul

Matthew Ramsey · May 16, 2016 at 8:26 pm

Paul, another who “just found your blog” love it!! I have been reading the mechanical Investing section of Motley Fool for about 4-5 years and have some experience with quant investing. How easily are the WWOW screens created on P123? I’m currently indexing, and would like to start exploring these strategies right away, how much of a difference does it make to start mid year VS January? Thanks! All the best.

paul.novell@gmail.com · May 19, 2016 at 8:27 am

Hey Matthew, welcome. I find P123 pretty easy to use. It takes some time but it’s pretty easy given some familiarity with basic programming. I don’t fancy myself as even a decent programmer and I didn’t find it too bad. The WWOWS screens are pretty basic as well.
WWOWS returns published in the book are an average of returns of portfolios started on each month of the year. So when you start doesn’t make a big difference.

Paul

Matt · May 20, 2016 at 3:02 pm

Paul, thanks for the reply.While reading the chapter on Consumer Staples, I noticed the next best strategy was to buy the top 25 as ranked just by yeild, nearly identical results and even easier to to screen for.

Hannes Kury · July 31, 2016 at 1:40 pm

Hi Paul. We are fellow fulltimers. Thanks for your site! I have enjoyed reading it and I want to get serious about these diversified DIY investment strategies.

I am assuming you are using some of the TAA and quant strategies discussed on your site. Which of the strategies you are actually running with real money and how much (percent) do you have in each strategy? I see that you have a lot of experience and background so I am interested to know what you are using now. If I decide to use the same or similar strategies it would help me read the material more efficiently.

Thanks so much!
Hannes

paul.novell@gmail.com · August 1, 2016 at 9:49 am

Thanks Hannes. I’ve mentioned my allocation on the blog a few times, mainly in comments. Overall, my target allocation is 50% risk assets, 50% bonds. The 50% of the risky part of my portfolio is split approximately half to TAA strategies like AGG3, and half to individual stock quant strategies. The bond portion of my portfolio is approximately half to a quant bond strategy and half to a buy and hold strategy made up primarily of municipal bonds. I have not rebalanced my portfolio in a while so right now my portfolio is not quite at these targets but it is close inning (e.g due to recent good performance the individual quant stock strategies and buy and hold bonds are over their target allocation).

Paul

Juan Carlos · August 23, 2016 at 10:16 am

Hi Paul,

Thanks for sharing your outstanding work and knowledge.
I enjoy your screencasts.
May I ask what tools do you use to make them?

Thanks a lot.

Best regards,

paul.novell@gmail.com · August 23, 2016 at 10:24 am

Thanks. I use Quicktime.

Juan Carlos · August 23, 2016 at 11:50 am

Thank you very much indeed!!!

Eric · September 16, 2016 at 8:01 pm

Paul,

Could not find a comment form following your strategy blog posts. So I’m leaving one here. Like your site and the ideas you share, but just to check I did a simple test to see if I could duplicate your results on the bond strategy. And I couldn’t.

This is for the simple GBM strategy select 1 ETF from TLT, JNK, IGOV, and SHY based on 12 month returns. Fist off you show results going back to 2007, and near as I can tell IGOV has an inception date of 1/21/09 and JNK of 11/28/07. And for the years where I found data I got different annual returns. So wondering how you got those results. I would feel a lot more confident looking at your results knowing I could duplicate them.

Thanks for any insights on how to resolve the discrepancies.

paul.novell@gmail.com · October 4, 2016 at 5:14 am

Eric, which post are you referring to? Thanks. Paul

Roman Greene · November 18, 2016 at 11:57 am

Enjoy your site, and am a subscriber. Question about abandoning the screens and switching to Allocate Smartly: Does this mean the FINVIZ Daily AGG3 AGG6 Portfolio Daily web page is no longer being updated and should NOT be used?

paul.novell@gmail.com · November 19, 2016 at 5:37 am

Roman, I am using Allocate Smartly for my own portfolios now. I am not maintaining the Google excel sheets anymore. You can make your own copy and use them for yourself. They are pretty low maintenance in general but Google is infamous for changing stuff so they can and so stop working from time to time.

Paul

Steve · January 31, 2017 at 11:08 pm

Hi Paul,
I have made a copy of your FINVIZ Spreadsheet and would like to add a column that shows the 1 Week return of the ETF. It appears this information is on Finviz website in the same table, right above the 1 month return. Can you point me in the right direction for how I would edit your formula below?

=ArrayFormula( TRIM( SUBSTITUTE( SUBSTITUTE( SPLIT( CONCATENATE( REPT( ImportHTML(ʺhttp://www.finviz.com/quote.ashx?t=ʺ&B2,ʺtableʺ,11) & CHAR( 9 ) , ISNUMBER( MATCH( ( {1,2,3,4,5,6,7,8,9,10,11,12} + ( 12 * {0;1;2;3;4;5;6;7;8;9;10;11} ) ) , { 24;36;48;60;72;132;140;144} , 0 ) ) ) ) , CHAR( 9 ) ) , ʺ*ʺ , ʺʺ ) , ʺ%ʺ , ʺʺ ) ) + 0 )

paul.novell@gmail.com · February 6, 2017 at 5:01 pm

Steve,

The numbers in the last part of the formula, “24,26,48….” represent cell numbers in the FINVIZ table that contains all the data. ‘Index’ is position 1 and the table counts left to right. So, the 1 week return is position 12 in the table. So, to add the 1 week return to the formulas, then add 12 in front of ’24’ in the formula, separated by a semi-colon.

Paul

Hannes Kury · February 10, 2017 at 2:11 pm

Hi Paul,

I want to read your blog in its entirety or close to that. Should I start with your oldest/newest post on the site or should I read through individual topics?

Thanks
Hannes

Cro_magnon · April 9, 2017 at 6:55 am

Hi Paul,

Really impressive blog! thanks for doing all the work on O’Shaughnessy strategies and demonstrating the workings as an individual investor.

I recently read Patrick O’Shaughnessy’s Millenial Money and the strategy he outlined is concentrated but combines value, momentum and quality to achieve pretty good results. I was wondering if you had given any thoughts on implementing this additional strategy.

Regards.

paul.novell@gmail.com · April 9, 2017 at 8:09 am

Thanks. Yes, if you look at the quant portfolio descriptions on the Portfolios page you will see value strategies and momentum strategies, and combo strategies. Quality is integrated into these and not stand-alone.

Paul

Aerfally · May 8, 2017 at 10:12 am

First thing’s first: This website has been tremendously helpful, and I have donated in kind. You have added valuable information to the community. It’s refreshing. Thank you.

Is there a particular portfolio management software, either online or stand-alone, you would recommend?

Jack · August 12, 2017 at 8:25 pm

Wow!
I have been considering the RV life a couple of years now but still in the house And saw your website, but new nothing about options about a year ago. I have been studying options intensely for 3 months now and paper trading for a month. Searched for option info and your site/blog came up, but I saw your RV site info writings a year ago, great! I have a friend who sells put and covered calls turned me on to it. Funny but your an inspiration, thanks for the data!! Have fun out there,
Jack

Mark · July 9, 2018 at 8:15 am

Would you mind sharing where or what charting program you use to plot the 12 month moving average on the unemployment chart? I know it can’t be done at FRED. I’ve been looking everywhere. Thanks

paul.novell@gmail.com · July 9, 2018 at 8:26 am

Hey Mark, you can do it in Stockcharts. $$UNEMPRATE is the symbol. I find the easiest way is to use the FRED excel add-in and just do it in excel. That way I can add any other economic data series I want with ease.

Paul

Peter Holzel · September 19, 2020 at 6:40 am

Hi Paul,
Congrats on your ten year! Excellent site you have here. I noticed there appears to be an error on your gtaa portfolios page, where it calculates allocations. I thought you would like to know. Regards, Peter.

https://investingforaliving.us/gtaa-based-portfolios/

paul.novell@gmail.com · September 20, 2020 at 12:47 am

Thank Peter. Yeah, thanks. I am aware of that. The interaction between FINVIZ and Google sheets appears to have broken. And so far I can’t get it fixed.

Paul

Sridip Banerjee · December 25, 2020 at 5:03 pm

Hi Paul, Can you please share a history of the past dates when vol curve model changed its status(at least last 5 years)? I am a recent subscriber. From your old posts I know that it changed status around Feb 24th, 2020(initial corona scare time). Did it give any signal around end of October, 2020(presidential election time)? I am planning to trade some leveraged ETF based on your signal, and trying to figure out how past returns would look like. I think it would be also helpful for other subscribers.

paul.novell@gmail.com · December 26, 2020 at 12:41 am

Hi Sridip, there is a full list of trade dates in the original post for the model.

https://investingforaliving.us/2019/12/20/quant-investing-volatility-curve-model/

Paul

Tony Smith · January 20, 2021 at 1:04 pm

Hi Paul,

Happy New Year!!

I was going through the QuantPulse page and wanted to confirm my understanding.

Does the service combine multiple strategies and then provide the asset allocation across the portfolio, or are those strategies run independently and the user has to figure out the allocation? Also, do you combine them for the users, or the users have to pick-n-choose?

paul.novell@gmail.com · January 21, 2021 at 3:06 am

Hey Tony,

The answer is yes, and all of the above. I run the strategies independently, I offer some combinations, and users can pick and choose.

Paul

Tony Smith · January 23, 2021 at 5:13 am

Hey Paul,

Thanks for the reply.

I want to run a mix portfolio of 60% quant & 30% TAA. Does this mean I need to get subscription to both Economic & Quant Pulse? If yes, do you combine the two and offer it as a complete portfolio approach?

paul.novell@gmail.com · January 25, 2021 at 3:06 am

Yes. But when you subscribe to Econ Pulse you can get Quant Pulse for an extra $25 (instead of $40), with a coupon code.

And yes, there are some models that combine both approaches into an integrated portfolio.

Robert Lyle · April 19, 2021 at 5:12 am

Re: Quant investing: low volatility strategies
Paul / March 20, 2019

Paul,
Your comment:
“As the table shows, low volatility on it’s own, the USMV ETF, outperforms the benchmark on both return and risk-adjusted return (sharpe ratio), as we would expect for the historical research.”

However —
USMV seems to have launched in October, 2011 but you show performance back to 2004. Did you use a surrogate for USMV? I noticed that from Oct. 2011 to present that the benchmark “(SPY) is well ahead of USMV.

I’m a neophyte, so I maybe I’m missing something. Robert.

Paul · April 20, 2021 at 4:34 pm

Hi Robert,

There are synthetic data series that take the performance of USMV back in history. The tool I use for backtesting, P123, gives me
access to such a data series.

Paul

rswilkes · August 28, 2021 at 6:57 am

Hi, Paul
Reading through your various posts on SWR and specifically it’s use in calculating them for various portfolios and comparing TAA portfolios, Can you point to the formula used for calculating those in that spreadsheet table? I’m looking at balancing the short term SWR against a probable reduction in spending demand in future years and the current market conditions. ie establishing a base requirement, supplied by pensions, social security and annuity contracts, while having the ability to spend extra as the models performance adds extra returns over the inflation adjusted return.

Paul · September 2, 2021 at 1:25 am

Unfortunately there is no simple formula for SWR. It’s a recursive excel solver type problem. Send me an email and we can talk about it some more if you like.

Paul

Henry Stern · December 1, 2021 at 2:16 pm

As of today (12/1/2021), the “3mo % Returns”, “1 Yr % Returns”, “YTD Return %”, and “Abv/Bel 200 SMA%” columns in the “GTAA Based Portfolios” spreadsheet are all still showing stale numbers, as they have for several months now. Since the “3mo % Returns” and “1 Yr % Returns” numbers are used to calculate the “Avg 1/3/6/12 month” values, the “Rank” and “Cash Filter” columns are also incorrect, which basically invalidates the main point of the spreadsheet.

The “GTAA Based Portfolios” spreadsheet could return to being a useful tool, which it isn’t now, if this problem were corrected.

Paul · December 3, 2021 at 1:55 am

yeah, you are right. I updated the files.

Paul

Joel · January 17, 2022 at 6:31 am

Hi Paul,

First of all great website, thank you for providing this service.

I have a question that I’ve wanted to ask you about the calculation of the portfolio’s performance: do you test the portfolios performance (CAGR, Sharpe ratio, etc…) with 25 or 10 stocks portfolio, or do you test the performance with all the stocks that meet a certain criteria?

Thanks

Paul · January 18, 2022 at 12:54 am

Hey Joel, thank you.

I run the quant models in two versions, 10 and 25 stock portfolios. There is no need to hold all the stocks that meet the strategies’ criteria.

Paul

Peter Stratton · January 27, 2022 at 9:16 am

Hi Paul,
I see that a “model change” occurred after the market close last night, but I didn’t see it until this morning. I didn’t receive an email. Did emails go out? If so, what do I have to do to get the emails?

Paul · January 27, 2022 at 9:30 am

Yeah you weren’t on the list for some reason. Fixed.

I always post the updates to the archive as well.
https://investingforaliving.us/quantpulse-member-home-page/quant-updates-archive/

Douglas Goullet · April 22, 2024 at 2:56 am

Hello, these numbers are very good! How did you backtest it? best

Paul · April 22, 2024 at 3:07 am

Hey Douglas, I use Portfolio123 for all my quant backtests.

Paul

Kevin · April 23, 2024 at 9:40 pm

Hi Paul,
Are you planning to update the stats for the economic pulse portfolios in the blog? It would be interesting to see the effect of the bond bear market and (if possible) using BOND instead of 10Y for risk off.

Paul · April 23, 2024 at 11:40 pm

Yeah, I’ll do that in an upcoming post.

If you happen to habe an AllocateSmartly subscription my base model, SPY-COMP, is kept track of there.

Kevin · April 24, 2024 at 9:09 am

Thanks!

Kevin · April 27, 2024 at 10:39 pm

What is the turnover for the 30 stock quant strategy. Is it typically the full 30 stocks every month?

Paul · April 28, 2024 at 12:04 am

Turnover among the top 3 strategies is about 15%, so about 1 strategy every 6 months.
Each strategy itself has it’s own turnover but you’re subject to that no matter what. I keep it
very manageable by only selling stocks that violate certain sell rules. There is no reason to have the
strategies be high turnover.

Kevin · April 28, 2024 at 11:21 am

OK sounds good. 360 round trip trades per year would be daunting to many investors.

Paul · April 29, 2024 at 1:52 am

Agree. Not investable with that many trades for most people.

Nathan · April 30, 2024 at 10:51 pm

I’ve noticed the GTAA Portfolios spreadsheet page often has incorrect info. In most cases, it appears to just be a minor difference, but occasionally its way off. For example, as of April 30, 2024, which is when it says it is updated through, it shows MTUM as being ranked 12th with negative 1-, 3-, 6-, and 12-month returns. But it is actually the 1st ranked ETF and while the 1-month return is correct, the 3-month shows -6.96% but is actually +7.01%; the 6-month shows -4.27% but is actually +29.29%; and the 12-month shows -13.83% but is actually +25.66%. It may just be an issue with Tiingo – not really sure – but thought I’d at least bring it to your attention.

Paul · May 2, 2024 at 5:30 am

Thanks. Fixed.

Paul