I’ve been trading a portfolio of about 29% of my assets while waiting for the election to shake out and the future to declare itself. The other 71% is sitting in interest bearing cash accounts.
International socks 0.1%
US stocks 4.3%
My efficient frontier calc is 4.1% return and 3.4% risk My actual return YTD is 6.5%. My biggest winner is BTC and Etherium, my second biggest is GLD and my third is QQQ. Other significant proportions include commodities and TIPS as a % of their respective categories. My fee structure 0.25%
I’m trading a quantitative 4 quadrant system that has me long sector funds based on rate of change of inflation and economic acceleration/deceleration. I could go long/short but Roth and TIRA won’t allow shorting except by trading long/short ETF pairs like QQQ/PSQ or GLD/DGZ. I’m not day trading but trend trading a proprietary risk range, so when the price of an asset hits the bottom of the range I buy when it hits the top I sell and either go short or wait for the bottom to buy again. This causes intra-period compounding when trading in and out of a range. In other words if I buy $100 worth and sell at $105. When the price hits the bottom of the range $105 gets invested. If it goes then to 111 that gets invested at the next low end of the range etc. The cycles happen when they happen but they do happen several times a year and so compounding happens several times a year. The system has a quantitative directional test which tells you when a trend switches from bullish to bearish in the short medium and long term so if all hell is going to break loose it tells you to get out. If you’re out and miss a tiny bit of upside, who cares. The point is to not get squished by big downside which takes forever for recovery.
It is not set and forget. It requires daily and sometimes intra-day monitoring. If you can go short in your accounts you make money on the way up and then make money on the way down. If not you make money on the way up and go flat before the way down preserving your capital.
I don’t know what real inflation is today. It’s clearly accelerating based on commodity prices but I’ve made about double my nut/mo YTD, with only 30% of my money at risk, in the craziest year in my investing lifetime, with a net asset risk of 3.4%. Good enough for me. As a 68 yo man the land of Lucy In the Sky With Diamonds, I’m happy enough with base hits. I don’t quite know how to analyze tangerine trees and marmalade skies, except I’m clear we are not in Kansas anymore despite what Larry Kudlow or CNBC says.
As things stabilize with this virus and economic disruption over the next 4 years +-, I’ll be plowing more cash into risk assets always buying low and selling high, compounding that investment while avoiding the killer draw down. As investments permit I will diversify some internationally, and across currencies because given the multi trillion money pump in the US, it’s no longer safe to be 100% tied to US or the devaluing US dollar.
Next Jan. my wife and I start SS. She will be 62 and will file for 800/mo and I will file spousal for 400/mo. When I hit 70 our combined SS will jump to 4500/mo inflation adjusted, till she hits 66 and 10 mos, at which point it will be 5500/mo inflation adjusted. I call this the SS dosey-doe, and will maximize SS payout for my wife and I throughout. Since SS is presently tax advantaged and inflation adjusted maximizing the payout is desirable when it comes to portfolio asset mix.
I still continue with Roth conversions. It was a better deal for survivors when conversion ended at 70, but I’ll take advantage of the age 72 law as it exists. We’ll see what the Dem’s are going to do about tax law and debt monetization after Bernie Sanders is sworn in as Treasury secretary. Sturgis is this weekend. 250K people are partying and not a mask in sight. It will be interesting to see the spikes in late August. Wonder if they will make book on this event on BarStool Sports?