A bit of volatility arrived this week, leading to a portfolio calling for a far lower stock position. Interesting, the up today was larger than the down yesterday. We don’t care if volatility is up or down, so even though today was a good day in stocks, the higher volatility is a warning sign that things may be changing, and the portfolio still warrants a mid-week rebalance even on an up day. On July 20th the portfolio rebalanced to:
44% SPY , 28% TLT , 28% GLD
See the Portfolio page for charts and tables. It will update soon if it hasn’t already
*All investing strategies come with the risk of loss, including this one which we all saw clearly this week. This portfolio may not be appropriate for your investment goals and requirements, and it is not investment advice.
Question about your portfolios – it looks like the components are all given in increments of 4% for most weeks. Only when cash is non-zero is the 4% increment broken. “Is this a bug or a feature?” I don’t think you’ve published the 3-asset plus cash algorithm, but perhaps you’re sampling a 26x26x26 grid for the 3 assets and choosing the highest value?
Both. Its on purpose to reduce turnover as small moves dont make that much difference, so it only accepts a change of 4% in the assets, and scalled down at 5% intervals with cash when needed.
While this somewhat works, I could have used different methods to keep turnover down than I did that would have worked better.