That and the fact that (a) you are selecting as many ETFs as there are equity ETFs, and, therefore, (b) during times like 2008 you want to have very strict criteria to hold an equity ETF: if you can find a fixed income asset that presumably will do better than the equity ETF, you invest in the former.
This is the general idea. The method is almost universal if you follow the guidelines.
For example you can remove all but two of the non-fixed income ETFs in the basket from IJJ, IJS, EEM, EFA, IYR and CEF, retain all the other (fixed-income ) ETFs in the basket and select two instead of five as described above, and you will get similar results.
Doubling The Return Of The S&P 500 Over 20 Years [View article]
Quarterly switching based on the performance in the prior quarter yields a CAGR of 12.95% during 2009-2012 based on S&P index data.
Quarterly switching based on the performance in the immediately prior month yields a CAGR of 22.48% during 2009-2012 based on S&P index data.
Similar improvement occurs with the actual ETFs - SPLV and SPHB. (The 2012 return is doubled if you use the prior month's performance rather than the prior quarter's.)
The best performance is obtained if you switch monthly, and include TLT in the mix: over 31% with the S&P index data (2009-2012) as well as with the actual ETFs during 2012-2013.
By the way if you just want double the S&P 500 returns, you do not need to do this much work. For example, an yearly rebalanced equal weight portfolio of MIN, MMT, and BKT returned much higher than double the S&P 500, with risk of only 15% during 1991-2013.
I don't know about Canada but most studies in the US suggest that the elimination of such waste in government (excluding Defense I suppose, since Defense is sacrosanct) would have very insignificant effect on the overall fiscal picture.
Canada is probably different because it is not the highest on the list of countries sorted by expenditure on defense.
To make any real dent without touching defense, you will have to transform USA into a third world country with poor on the street and most of the retirees in the poorhouse as they were in the thirties. Some may think that such an outcome is somewhat less than desirable and pleasant.
Allocating Within The All-Weather Sailboat Portfolio: Part 2 [View article]
PRPFX is definitely better than many alternatives, but if there is room for improvement, why not?
I think that weekly or monthly rebalancing is a stretch, and too much work and expense for individuals, but with appropriate selection of ETFs and quarterly rebalancing you can do better than PRPFX. An hour of work every three months that leads to an increase of CAGR from around 10% to 13% or higher with similar or lower volatility and drawdowns is probably worth the effort. This can indeed be accomplished with IJJ, IJS, EEM, EFA, CEF, and some fixed income ETFs mixed in together with an appropriate quarterly re-allocation method.
grand bargain is an unmitigated fraud propagated by the crackpot billionaire Pete Petersen and designed to inflict pain on the poor and the middle class and on the elderly on SS, reduce or eliminate SS and medicare altogether, all for the purpose of permanently reducing the tax cut for the wealthy to levels never seen before even during the times of the greatest economic growth.
If the conservatives were serious about the deficit as they claim to be when they are scuttling all efforts to help the economy whose low growth rate is hurting all but the richest, they could have solved the problem when they had years of control of the government. All they are after is permanent tax cut for the wealthy. They do not care about the deficit.
Equity/Fixed Income Momentum - April 2013 [View article]
You have a choice of investing in just one instrument or multiple ones. I would surmise that most would prefer the latter to hedge their bets. Of course it depends on the size of the portfolio too, which also obviously determines the effect of trading costs on the overall returns.
Equity/Fixed Income Momentum - April 2013 [View article]
I agree with all of what you say, but the strategy should be called 'Paired Switching'. A more robust version of this strategy that suggests itself is 'Polygamous Paired Switching', examples of which are given here:
Equity/Fixed Income Momentum - April 2013 [View article]
One of the more lucrative pairs for this monthly paired-switching approach is IJS/TLT, which yields 16.1% during 2003-2013, and has a Sharpe Ratio of .78 with maximum monthly drawdown of 17%, but no annual loss during this period.
The Basic Portfolio [View instapost]
The Basic Portfolio [View instapost]
The Basic Portfolio [View instapost]
For example you can remove all but two of the non-fixed income ETFs in the basket from IJJ, IJS, EEM, EFA, IYR and CEF, retain all the other (fixed-income ) ETFs in the basket and select two instead of five as described above, and you will get similar results.
It works well with mutual funds as well.
Doubling The Return Of The S&P 500 Over 20 Years [View article]
Quarterly switching based on the performance in the immediately prior month yields a CAGR of 22.48% during 2009-2012 based on S&P index data.
Similar improvement occurs with the actual ETFs - SPLV and SPHB. (The 2012 return is doubled if you use the prior month's performance rather than the prior quarter's.)
The best performance is obtained if you switch monthly, and include TLT in the mix: over 31% with the S&P index data (2009-2012) as well as with the actual ETFs during 2012-2013.
By the way if you just want double the S&P 500 returns, you do not need to do this much work. For example, an yearly rebalanced equal weight portfolio of MIN, MMT, and BKT returned much higher than double the S&P 500, with risk of only 15% during 1991-2013.
Flying High On Borrowed Wings [View article]
Canada is probably different because it is not the highest on the list of countries sorted by expenditure on defense.
To make any real dent without touching defense, you will have to transform USA into a third world country with poor on the street and most of the retirees in the poorhouse as they were in the thirties. Some may think that such an outcome is somewhat less than desirable and pleasant.
Allocating Within The All-Weather Sailboat Portfolio: Part 2 [View article]
I think that weekly or monthly rebalancing is a stretch, and too much work and expense for individuals, but with appropriate selection of ETFs and quarterly rebalancing you can do better than PRPFX. An hour of work every three months that leads to an increase of CAGR from around 10% to 13% or higher with similar or lower volatility and drawdowns is probably worth the effort. This can indeed be accomplished with IJJ, IJS, EEM, EFA, CEF, and some fixed income ETFs mixed in together with an appropriate quarterly re-allocation method.
Flying High On Borrowed Wings [View article]
If the conservatives were serious about the deficit as they claim to be when they are scuttling all efforts to help the economy whose low growth rate is hurting all but the richest, they could have solved the problem when they had years of control of the government. All they are after is permanent tax cut for the wealthy. They do not care about the deficit.
Simple Monthly Strategy Based On Polygamous Paired Switching [View instapost]
Thanks.
Over-Diversification? Concentrated Holdings Yield Better Results [View article]
Equity/Fixed Income Momentum - April 2013 [View article]
Equity/Fixed Income Momentum - April 2013 [View article]
http://bit.ly/10z2Nz1
and
http://bit.ly/17f5vyi
The latter one re-balances every quarter, and averages over multiple evaluation periods and holding periods and therefore more practical and robust.
Flying High On Borrowed Wings [View article]
That's a new one. As opposed to 'collective' Kumbaya approach to investing?
Equity/Fixed Income Momentum - April 2013 [View article]
An Adaptive Asset Allocation Example [View instapost]
Thanks a lot for your interest and kind words.
I write these mainly to record the results that I find interesting. Positive feedback from the readers is an added bonus that I greatly appreciate.
Flying High On Borrowed Wings [View article]
Investors who want to invest in stable profit generating companies can always find those. Even now.