I think of Van Tharp’s marble game when it comes to monthly performance of an investing strategy. Green marbles represent positive monthly returns and red marbles represent negative monthly returns. Your strategy has an influence on the number of each colour of marbles in a bag. Each month you put your hand in the bag, pull out a marble and look at it to see if your strategy provided a positive or negative return. In that frame of reference I have just pulled out the twelfth consecutive green marble as my strategy provided a 3.23% return in October garnering a 16.2% return year-to-date.
Suffice it to say that I am very pleased with such consistent returns but that is what the combination of my strategy and the markets have provided. At some point, the markets will not be so kind and I will experience a draw down. Provided that the markets do not drop precipitously in a very rapid pace, my ETF momentum strategy should provide downside protection. Such is a key benefit of a tactical asset allocation investing strategy.
My largest holding for November is EPP (iShares MSCI Pacific ex-Japan).