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

Tactical Asset Allocation (TAA) Monthly Feature - June 2012

Tactical Asset Allocation (TAA) Monthly Feature - June 2012

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 /]

In the 9 months I've freely shared this model on my blog it has proven to provide a balanced way to achieve growth in a rising market (the market has only gone mostly up during this time) even though the model has very sparingly used actual stock index funds in the process.  And now it's proving it's worth in a down down market.

May was brutal for stock investors with the Vanguard Total Stock Market Index (our proxy for the overall stock market) dropping roughly 7%.  The TAA model however dropped less than 1/2 of that with the largest holding (bonds) performing nicely positive and the second largest holding (real estate) losing about 20% less than stocks.

The model still has no gold and is decreasing exposure to stocks while increasing exposure to real estate and bonds.  Overall this isn't really much more conservative - just a shifting of sorts into different types of assets for the combination of growth and safety.

Since I'm publishing this already a week into June so far these allocation changes are paying off.  Real estate is outpacing the stock market during the last couple days rally and bonds aren't giving back much of what has been a very nice few month run.

Since the model I share here is "balanced" keep in mind it always keeps at least 50% of the portfolio in either bonds or cash.  The whole idea of this balanced tactical asset allocation (TAA) approach is to keep a highly diversified portfolio that can get through the markets major ups and downs without the dizzying volatility of just growth investments.  It's not perfect, but so far so good.

For those that want to track the performance of this model here's the most up to date info:

[table id=5 /]

To see how performance is measured just check out the static page on TAA here.

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.

If you like what you see here feel free to pass this on to others via email, use the Facebook icon below to share it there, or just suggest in personally to a friend.

Thanks for checking out this post and have a great day.


Jason Wenk

Market Update - June 15, 2012

Market Update - June 6, 2012