Sure. And no they can’t really be used with the strategies on Allocate Smartly. The strategies would need to change.
That is why I have 3 strategies in the newsletter.
Paul
Comment on Introduction the Economic Pulse Newsletter by paul.novell@gmail.com
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Comment on Introducing The Economic Pulse Newsletter by Adam
Hi Paul!
It looks great.
I will sign up soon, but as other have asked for, a sample of the newsletter would be appreciated.
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Comment on TAA: choosing your first strategy by Philp
Really practical post!
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Comment on TAA: choosing your first strategy by Earl Adamy
I started researching Tactical Asset Allocation strategies in late 2011 because I did not want to have to repeat the process of hedging my investment portfolio with short SPX futures. While very successful, that was a time-consuming and stressful process.
So my starting point with TAA was to avoid large portfolio drawdowns with a secondary objective of achieving good returns. I did not care so much about beating the market as now allowing the market to beat me. My objective for TAA across a full Bull/Bear market cycle has long been a maximum of 10% Bear Market Drawdown and a minimum of 10% Compound Annual Growth Rate.
While it is possible to boost TAA returns during Bull Markets using a process of strategy shifting based on market conditions, it is a fact that most TAA strategies will lag annual returns from buy and hold (aka Strategic Asset Allocation) for 30%-50% of a Bull Market. It is that issue which brings out a “recency bias” which leads investors to forget about painful drawdowns in favor of choosing higher returns. Unfortunately for many investors, that bias becomes most acute in late stage Bull markets.
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Comment on TAA: choosing your first strategy by paul.novell@gmail.com
Agree Earl.
Paul
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Comment on TAA: choosing your first strategy by Andrew
Thank you for your great posts. I still haven’t implemented all the help you gave me in January. Believe it or not that night I ended up in the hospital with internal bleeding and took it easy most of this year. It looks like your newsletter would be a good investment.
Why did you cross out Faber’s name and not compare the Agg 3? Sorted by return it is #3 in my account.
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Comment on TAA: choosing your first strategy by paul.novell@gmail.com
Sorry to hear Andrew. Hope you are all well now. I crossed out Faber’s GTAA5 because it doesn’t beat buy and hold. And I didn’t include AGG3, which is a strategy I use, because the number of trades is over the threshold of 12 that I set for this.
Paul
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Comment on TAA: choosing your first strategy by Eric Schoellkopf
Paul,
I subscribed to Allocate Smartly after reading about it on your blog. It is uncanny how you culled the list down to the same methods I chose to beat the market with minimum number of trades and minimum drawdown.
The portfolio I chose is 40% Vigilant Asset Allocation, 35% Stoken Monthly, and 25% Antonacci GEM. I chose day 6 as the trading day each month based on a past study that showed the markets rise the last 2 and first 5 days of the month disproportionately to the other periods of the month due to new money entering from 401k/pensions, so I wanted to capture those gains in the momentum methods before a signal is determined to help insure I am staying on “the fastest horse”. If you run this portfolio you will see NO NEGATIVE YEARS years from the data which starts in 1990, a 6.7% max drawdown, 13.2 % CAGR, 1.35 Sharpe, and 2.55 Sortino.
I love having a mechanical method with a very smooth ride (based on past results). Thank you for expanding my knowledge of what is possible with TAA.
Eric
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Comment on TAA: choosing your first strategy by paul.novell@gmail.com
Great to hear Eric and nice strategy. Thanks for sharing.
Paul
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Comment on TAA: choosing your first strategy by Eric Schoellkopf
Paul,
Since I am concerned that long term bonds will face a headwind of rising rates, and the GEM, Vigilant, and Stoken methods deploy bonds as stock alternative, when they switch to bonds I invest those funds in your “Novell’s Tactical Bond Strategy” which is published with AllocateSmartly. I like that your bond method provides a cash option if bonds are performing poorly. It would probably be complicated to program, but it would be nice if they could backtest your bond method as the bond portion of the methods listed on AllocateSmartly vs the bonds spelled out in their methods.
Eric
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