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Cliff Smith
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I am currently a retired Aerospace Engineer. I am married with three children and seven grandchildren. I was born in San Francisco, CA in 1949 and moved to Newport News, VA in 1951 where I lived until I went to college. By God's grace, I received a B.S. degree from Virginia Tech (1972), a M.S.... More
  • ETF Recommendations For August 1, 2014 5 comments
    Jul 31, 2014 9:37 PM | about stocks: FPX, IYR, RWX, SHY, BIL, TLT, TFI, HGI, SCHH, TLO

    Please realize you use these recommendations at your own risk. I am not a registered financial advisor. If for any unforeseen reason I do not post the recommendations for the next period, please sell the ETFs and go to cash.

    Shown below are the August 1, 2014 ETF updates for the tactical strategies I have discussed in my Seeking Alpha articles. August 1st is the day to make your trades on these strategies. More information on the strategies can be found in the linked articles.

    The figures shown below are taken from ETFreplay calculations, and the entire 2014 selections and results are presented. I have been tracking most of these strategies in real time since the beginning of 2014. All of the strategies have been backtested, some as far back as 2000, but all have been backtested to 2008 (except RRBS3).

    Here are the strategies that are presented below:

    Equity Strategies:

    SSSEquity4 Strategy

    AllAssetsExceptBonds Strategy

    Bond Strategies:

    Bond-Only Strategy

    Low Volatility Bond Strategy, LVB

    Rising Rates Bond Strategy, RRBS3

    Simple Bond Strategy on HYLD/SHY

    Municipal Bond Strategy, MBS

    Combined Strategies:

    Schwab Commission-Free Strategy -60% Equity/40% Bonds

    Unified Tactical Strategy, UTS - 60% Equity/40% Bonds

    Unified Bond Strategy, UBS - 100% Bonds

    SSSEquity4 Strategy

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    AllAssetsExceptBonds Strategy

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    Bond-Only Strategy

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    Low Volatility Bond Strategy, LVB

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    RisingRatesBondStrategy, RRBS3

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    Simple Bond Strategy on HYLD/SHY

    Trade on Day of 3 Day & 25 Day Moving Average Ratio Crossover

    Please note: If you are interested in this strategy, I can send you an alert the day it occurs. Please send me a Seeking Alpha message asking to be included on the HYLD/SHY alert list. Please include your email address (no one can see it but me).

    Buy HYLD: Jan. 2, 2014; Sell HYLD: Jul. 17, 2014 Return=5.36%

    Buy SHY: Jul. 17, 2014; Sell SHY (open trade)

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    Municipal Bond Strategy, MBS

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    Schwab Commission-Free Strategy

    The picks this period include TLT that was used as a proxy for TLO. Rather than buying TLT, just purchase TLO (40% instead of 20%).

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    Unified Tactical Strategy

    This strategy combines SSSEquity4 (30%), AllAssetsExceptBonds (30%), and LVB (40%).

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    Unified Bond Strategy

    This strategy combines Bond-Only Strategy (25%), LVB Strategy (25%), and RisingRatesBondStrategy, RRBS3 (50%).

    (click to enlarge)

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    These strategies have been backtested over a limited timeframe and shown to produce good growth with minimum risk, but future results may be dependent on factors not considered. Use these recommendations at your own risk.

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Comments (5)
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  • ThomasJSullivan
    , contributor
    Comments (4) | Send Message
     
    why is the UTS using shy instead of TLT while all your other bond strategies are recommending TLT?
    1 Aug, 12:16 PM Reply Like
  • Cliff Smith
    , contributor
    Comments (467) | Send Message
     
    Author’s reply » SHY (or its cousin BIL) is the pick for the LVB Strategy. TLT is the pick of the Bond-Only strategy. The UTS uses the LVB Strategy as a bond sub strategy, not the Bond-Only Strategy. Thus, UTS picks SHY and not TLT.

     

    Hope I answered your question.

     

    Thanks,
    Cliff
    1 Aug, 04:13 PM Reply Like
  • ChipThompson
    , contributor
    Comments (4) | Send Message
     
    Hi Cliff,

     

    I am intrigued by you work and have been following for a few months now. Today, I have joined ETFreplay and have been trying to reproduce your results. I did fine for SSSE4 and LVB but I am having trouble duplicating recommendations for AllAssetsExceptBonds. I am using the universe of 15 ETFs plus SHY (including both RWO and IYR). I am using 4-month return and 4-month volatility weighted 65% and 35% respectively. I am applying the 4-month moving average screener. When I run the model for July 41, I get the following rankings: (they all pass MA filter)
    1.RWO
    2.RWX
    3. ADRE
    4. IYR

     

    I can't figure out how you get to the RWO and IYR result. I am thinking that you may have substituted IYR for RWO at some point but I still can't get to why ADRE didn't come in ahead of IYR.

     

    I really appreciate your gracious approach to sharing your ideas.

     

    Thank you so much,
    -Chip
    10 Aug, 02:39 PM Reply Like
  • Cliff Smith
    , contributor
    Comments (467) | Send Message
     
    Author’s reply » Hi Chip,

     

    I have changed the universe from the original universe. The old one does better than the new one in backtesting, but I switched to eliminate some ETFs with low volume (as I remember it).

     

    Anyway, the current results use the new universe. Here's the old universe:

     

    CSD
    EEM
    EFA
    EPP
    EWA
    GLD
    GURU
    IEV
    IJR
    MDY
    PJP
    RWO
    RWX
    SHY (Cash)
    VWO

     

    Here's the new universe:
    CSD
    EEM
    EFA
    FPX
    GLD
    IJR
    IYR
    MDY
    PJP
    RWX
    SHY (Cash)

     

    Hope that solves your problem.

     

    Thanks,
    Cliff
    10 Aug, 05:36 PM Reply Like
  • ChipThompson
    , contributor
    Comments (4) | Send Message
     
    It does, thank you very much!
    11 Aug, 06:27 PM Reply Like
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