Fintech executive, writer, math geek, and investment systems developer. Founder and CEO of Altruist and Founder of FormulaFolios.

Tactical Asset Allocation (TAA) Monthly Feature for January, 2012

Tactical Asset Allocation (TAA) Monthly Feature for January, 2012

Happy New Year (a bit belated). I just got back from a family vacation in Vail so this is my inaugural post for 2012.  Since there were no broken bones despite rather icy conditions I'd consider it a successful vacation - but since my body aches like never before I suppose it's father time telling me I no longer belong on the mogul runs or terrain parks any longer.

I've made a couple changes to the layout of the blog to make it easier to find updates on monthly features like Tactical Asset Allocation and Recession Probability - so feel free to peruse around to check them out.

Below are the most up to date allocations for the Tactical Asset Allocation model I've written about on the blog.  For those needing a refresher on what TAA is and why I think it's important as part of an investment plan just click here to revisit the first post.

[table id=6 /]

I've been sharing these allocation for 3 months now and for the most part TAA has proven quite resilient.  December though wasn't great as the model suggested a hearty allocation to gold and none in stocks or real estate.  Gold got pushed down roughly 10% in December and despite an even larger allocation to bonds the model dropped 4.37% whereas the benchmarks were closer to break even.

For better or worse I've felt it's important to keep tabs on this strategy and measure it's merit publicly, which is why it's become a monthly feature.  This is also why you'll notice in the table the tracking of an actual account versus a couple different benchmarks.  In the table the returns for 2011 are only the live returns of 9/30/2011 to 12/31/2011 and not backtested returns.

Moving into January this model still isn't buying into the stock markets recent resurgence and is still holding on to gold.  As of this writing this has been a smart move with the first week of January gold having moved higher 3.9% while the broad stock market is up 1.9% (as measured by the Vanguard total stock market index NOT the S&P 500).

As mentioned in past posts I'll update this model/strategy each month roughly 1 week into each new month.  This way scalpers can't just steal the research as their own and other financial professionals can't simply use the research to manage their clients money.

Towards the end of this week I'll post my full 2011 in review as well as my forecasts for 2012.  Thanks for making 2011 a fun and rewarding year of blogging and best wishes for your 2012.


Jason Wenk

An Independent Review of the Security Benefit Secure Income Annuity (SIA)

Market Update - December 29, 2011