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

Tactical Asset Allocation (TAA) // April 2015

Tactical Asset Allocation (TAA) // April 2015

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 /]

Previous Month Recap

It might seem an odd time to publish an update (this post is just a few days before the start to the new month - and therefore new allocation), but I've been off on some travel and want to kick off my return with some catch up posts. ;)

So far in 2015 there has been a change of the guard, so to speak, with all asset classes up just a percent or two, other than International Equities. International is up over 10%, substantially beating all other asset classes.

Unfortunately, since International is still only up a few percent the past 12 months, it still has a long ways to go in having truly good momentum. And as such, it is not quite in my model. Accordingly, we're just up a couple percent, much like most asset classes. Going into May I suspect International will become a healthy allocation, real estate will drop a lot, and US Equities will be somewhere pretty close to where its been.

YTD the model I publish here is finally doing what it was meant to do, shelter us from volatility. The "balanced" tactical asset allocation is up 2.13% while a simplistic blend of just stocks and bonds is up 1.26%.

Allocation Changes for This Month

There have been very few allocation changes the past few months for the model. It favors Real Estate, with a smaller allocation to US Stocks. Gold and Non-US Stocks have been completely out of the model for a few months or longer. Come May, however, I suspect International Equities will find their way into the allocation. Stay tuned as I'll be sure to post that update just a few days into the coming month.

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.

The model is mechanical, so it takes no lead from my opinions.  My opinion, however, is that stocks will not be able to sustain their current trajectory (forever).  A correction, even if mild, is due sometime in the near future (if not already under way).

Long Term Model Performance Versus Benchmark

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

[table id=5 /]

I've also added some long term metrics on return and risk here (complete with data going back to 1997):

[table id=9 /]

To see how performance is measured just check out the static page on TAA here. **Note** I only update the long term metrics quarterly versus monthly like the other tables above.

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.  If you are not currently a client, and would like to know more about this strategy - feel free to reach out to me directly via this contact form.  If you have general questions, just use the comment form a couple inches below this post.

Thanks for stopping by my blog and have a great day!


Jason Wenk

Market Update // How to handle this (painful) sideways market

Market Update // How to handle this (painful) sideways market

Tactical Asset Allocation (TAA) // February 2015

Tactical Asset Allocation (TAA) // February 2015