It’s sometimes uncomfortable when the portfolio goes heavily into one asset. It feels more exposed, and in some ways it is. But often it works out for the best as there are always reasons for the position sizes. This week was definitely one of the good times, up about two and a third percent.1 Not…
Month: August 2020
Portfolio on 8.21.20
Up three quarters of a percent for the week. Not a lot different from last week. Correlations are still high between stocks and bonds. Stock volatility continues to come down. So the cash gets deployed back into stocks. On August 21st, 2020, the strategy rebalanced to: 80% SPY , 12% TLT , 8% GLD
Leverage Aversion
A part of classical portfolio theory has always bugged me. It treats levered strategies fundamentally the same as ones that don’t borrow. I think that inherently everyone knows they are very different. Before we dive in, think about this question: Modern Portfolio Theory Modern portfolio theory says the logical investment strategy is to invest at…
Portfolio on 8.14.20
Gave back all the gains from the week before, down 1.2% for this week. Gold and bonds were great help for most of the year, but not the last few days. I’m glad the strategy recently reduced it’s exposure to these two, I just wish it had gone further. I mentioned last week how the…
Portfolio on 8.7.20
Still climbing, up 1.18% for the week. This upward trend is relentless. Today was interesting though. Until the rally in stocks at the close, the everything was down, and meaningfully so. It was headed toward the worst day in 8 weeks until the save at the end. One day does not make a trend, but…
Along the Curve.
A funny thing about the top of a curve: it’s flat. This flatness leads to an interesting investment question: are you willing to give up some return to reduce the bumpiness of the ride? The Flat Top When you look at the geometric frontier as a whole and not just the top point by itself,…