Quite a good week. Up about 1.7%.
I’m pretty shocked by the portfolio rebalance today. I didn’t expect to drop bonds entirely any time soon. The portfolio is also right on the cusp of bringing in cash, which is strange. Furthermore, we’re looking at a very large change from week to week in holdings. Unlike last week, this portfolio is anything but normal.
On June 21th, 2019, the portfolio rebalanced to:
88% SPY , 0% TLT , 12% GLD
Why the major change? Well two things happened last week in the market. the volatility of bonds increased, and probably more importantly, their returns became more correlated to stocks. This means bonds aren’t as likely to provide relief to any stock correction. Gold is actually acting as a better hedge for a stock correction than bonds right now.
We’ll see what next week brings. Please remember, this isn’t a prediction of any kind. It’s where my model views the best position for the portfolio, under the understanding you will repeat similar market events multiple times over your investing life. Some weeks, it’s great, others not so great. Over the long haul though, it should maximize your geometric return.