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My Trade Journal for Stock Trades and ETF Investments

Stock Trades are Based on Custom Screens Plus AI Analytics

ETF Investments are Based on Tactical Asset Allocation

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Investing Update for the Week Ending September 30, 2022

Saturday October 1, 2022

The grind lower in markets this year continues relentlessly. The 60/40 portfolio is now down 20% year-to-date.  I’m certain that such a performance is testing the resolve of many investors to stick to a buy-and-hold strategy.

As for my overall portfolio, I have benefitted from the rise in the value of the US dollar versus the Canadian dollar. The majority of my investment holdings are in US dollars and that has partially helped me have a YTD portfolio change of about -2.5%. That’s a heck of a lot better than what a US investor has to show for holding a 60/40 portfolio. I will note that I am talking about a very short timeframe here which must be taken into consideration.

In addition to comparing the performance of a portfolio based on the ETF allocations that I publish here each week, I also compare my model’s performance to a basket of Tactical Asset Allocation ETFs. The period of time covered is too small to be of value but I present it here for your interest.

My Model Versus ETFs

 

Tactical Asset Allocations

The move into higher cash holdings permeates most of the TAA models I use. Collectively, my models now have a very high allocation to cash of 85.6%. You may ask “What does such a high allocation to cash mean in terms of a forecast for the near term?” In my opinion, it means little with regard to what happens next. Tactical asset allocation models aren’t predictive; the models I use simply move into the strongest performing ETFs with a positive past performance over the previous one to twelve months.

Tactical Asset Allocation Table

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Investing Update for the Week Ending September 23, 2022

Saturday September 24, 2022

The 60/40 portfolio is now down almost 18% YTD. My model portfolio is down 9.2% in comparison. For anyone who retired in the past year, this drawdown may be unsettling. It is possible that good news is just around the corner if the 4-year Presidential Election Cycle plays out.

The following chart from a recent post at  All Star Charts illustrates where we are in the 4-year cycle. Maybe, just maybe, the equity markets will soon be on an upwards trajectory.

4 Year Presidential Election Cycle

This article at Investopedia provides more discussion about the 4-year Presidential cycle.

 

Tactical Asset Allocations

The cash allocation of my models has increased again this week and now stands at 81.2%.

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Investing Update for the Week Ending September 16, 2022

Saturday September 17, 2022

The model that I use to signal when conditions are right to go long individual US stocks was very close to changing to a “Buy” signal this past week and then the inflation report came out which triggered a sell-off in most markets. With many of the ETFs that are components of my models falling in price this week, my allocation to cash has increased to 78.9%.

Year-to-date my model is down 8.2% versus 15.9% for the 60/40 portfolio. Seven US-based TAA ETFs that I follow are collectively down 11.3% YTD. For my Canadian readers, VBAL (Vanguard Balanced) is down 12.9%.  Relatively speaking, my model is performing satisfactorily. Of course, I would much rather have a positive YTD performance than be down the least.

 

Tactical Asset Allocations

Adaptive Asset Allocation Table

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