Tactical Asset Allocation + HBPP an intriguing combo

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ochotona
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Tue Mar 26, 2019 7:14 pm

pmward wrote:
Tue Mar 26, 2019 3:04 pm
Let us know the day you buy back in, so we all know to sell, hahaha.
That's about how it works, isn't it?
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by HappyMan » Tue Mar 26, 2019 9:25 pm

Thanks, ochotona-san! You are a true samurai. You honestly share your thoughts, ups and downs, and your plan of action. I always appreciate it in people.

As for HBPP, among which assets do you spread the capital by 25%?
ochotona wrote:
Tue Mar 26, 2019 2:51 pm
HappyMan wrote:
Tue Mar 26, 2019 8:59 am
Hi all,

The last trade day of this month is this Friday. Momentum, so far, points to stocks. Bonds have outdone them. Where will you invest for April?
I'm looking for an entry point at or below February's close (SPX 2784), when I got buy signals from both GEM and Economic Pulse portfolios. I tried to second-guess the signals, thinking we were looking at a bull trap. I still think that way, but I'm willing to accept that after a month at this level it's time to go back in.

But I'm going back in at HBPP allocation levels, 25%, very lightweight. I don't want any more whipsaws to drag around a whole bunch of capital. When things settle, I'll get back to my normal allocation. In 1994, GEM whipped for 11 months, then took off to the upside. I'm resigned that we could be whipping for much of 2019 before we decide... up or down?
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Wed Mar 27, 2019 5:37 am

After I reenter this will be my allocation

Stocks 28%
Gold 12%
Cash 13%
Intermediate Treasuries 47%

....for a smooth ride until it's time to truly go on the offense again.
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by HappyMan » Wed Mar 27, 2019 9:38 am

ochotona wrote:
Wed Mar 27, 2019 5:37 am
After I reenter this will be my allocation

Stocks 28%
Gold 12%
Cash 13%
Intermediate Treasuries 47%

....for a smooth ride until it's time to truly go on the offense again.
Thanks for the numbers! What do you use for gold? Which option for gold do you recommend at Schwab?
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ochotona
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Wed Mar 27, 2019 3:10 pm

HappyMan wrote:
Wed Mar 27, 2019 9:38 am
ochotona wrote:
Wed Mar 27, 2019 5:37 am
After I reenter this will be my allocation

Stocks 28%
Gold 12%
Cash 13%
Intermediate Treasuries 47%

....for a smooth ride until it's time to truly go on the offense again.
Thanks for the numbers! What do you use for gold? Which option for gold do you recommend at Schwab?
More than 11% is physical gold, less than one percent is GLDM ETF at TD Ameritrade in my HSA. Trades for free. SGOL trades for free at Schwab, and they lowered their expense ratio massively.

I'm going to use all of my dividends and bond coupons to slowly buy SGOL at Schwab. I am completely not liking how the US budget deficit projections look. Thank you Mr. President and Congress. I am moving my mind from the low end of the Rickards / Schiff 10%-20% gold range to the high end, which also make Golden Butterfly territory easily implementable.
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Thu Mar 28, 2019 10:20 am

PMWARD if you had to make an investment in stocks now, but you could alter the allocation, anywhere from 5% to 40%, how much would you tolerate?

5% is what I have now. 40% is what I had last year.

I'm thinking HBPP levels (25%-ish) then fahgetabouddit

Maybe buy 5% April, 5% May, 5% June, 5% July then I'll be up to 25%?
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by pmward » Thu Mar 28, 2019 11:23 am

ochotona wrote:
Thu Mar 28, 2019 10:20 am
PMWARD if you had to make an investment in stocks now, but you could alter the allocation, anywhere from 5% to 40%, how much would you tolerate?

5% is what I have now. 40% is what I had last year.

I'm thinking HBPP levels (25%-ish) then fahgetabouddit

Maybe buy 5% April, 5% May, 5% June, 5% July then I'll be up to 25%?
Well there's a couple ways it could be done. You could scale in like that. If you want to continue to trend follow with your entire stock allocation you could also buy up to your PP level now and put in a stop loss below the last short term swing low, which was 2722, to limit losses. That way you would only sell if we were setting a lower short term low, which would be an indication of at least a new short term secondary down trend. I would wait to closer to the close today though to get an idea of whether we hold 2800 or not, I would not buy in with any variable funds if we lose support at 2800. If you think we are going to get a next leg up though, buying as close to 2800 as possible would be a good bet as it's just above a support level that has been tested quite a bit recently and proven to be quite resilient, at least in the short term.

I think if I were you I would set an allocation for a hard PP that you always keep, then use a variable portfolio for your active management. So for instance, if you decide to do 80% of your portfolio allocated to PP then you could just buy another 15% of stocks now and just accept that they may go up or down, and the rest you could keep cash until you get an urge to market time back in. That's what I would do at least. I think it's a happy medium, where you always have your set allocation for stocks/PP that will always be held (so you don't miss out entirely on upside if you are wrong), and your allocation that you can actively manage to try to chase alpha. That also gives you some leeway to get back in and not miss the upside if we break out, yet allow you to sit on some cash, put on some shorts, or buy some defensive assets to wait for a more tempting buy in point for stocks in case we break down instead.
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ochotona
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Thu Mar 28, 2019 3:02 pm

My concept since starting this thread has been to hold somewhere between 40%-60% VP, and 60%-40% PP. So never less than 10% equity, never more than 70%. Which means I have to go out and buy and hold equity so I have from 10-15%.
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by Kbg » Thu Mar 28, 2019 10:36 pm

HappyMan wrote:
Tue Mar 26, 2019 8:59 am
Hi all,

The last trade day of this month is this Friday. Momentum, so far, points to stocks. Bonds have outdone them. Where will you invest for April?
Not sure, I will run my data and do what it says to do. Over the past two months there has been a lot of research using the basic GEM methodology and measuring momentum. Personally I have been convinced by it that having a single signal is not a good long-term strategy. I have moved to 10 different signals based on months 3-12. So each month gets 10% of the port and I might have something like 50% US 10% Intl and 30% bonds. I will most likely be trading every month, but I already like the fact that my portfolio is no longer binary. Under classic GEM a typical trade is a 100% commitment to whatever the signal is, whereas under this approach using the example I noted above, a typical trade may be a simple 10% allocation tweak to 40% US, 20% Intl 30% bonds.
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by InsuranceGuy » Thu Mar 28, 2019 10:58 pm

Kbg wrote:
Thu Mar 28, 2019 10:36 pm
Not sure, I will run my data and do what it says to do. Over the past two months there has been a lot of research using the basic GEM methodology and measuring momentum. Personally I have been convinced by it that having a single signal is not a good long-term strategy. I have moved to 10 different signals based on months 3-12. So each month gets 10% of the port and I might have something like 50% US 10% Intl and 30% bonds. I will most likely be trading every month, but I already like the fact that my portfolio is no longer binary.
I agree, hard to measure success unless you follow your analysis unemotionally. I'm interested in following how your multiple lookback average works out. I'm still running with my modified GEM which adds REITS into the mix and allows the model to scale back to 50% cash/50% risky asset when volatility shoots up.

Short term results will always vary, but while my modified version did not miss the October drop it did dodge the December fallout and has gained double digits YTD on the non-leveraged portion. Cheers to momentum continuing to be a strong indicator of future performance!

IG
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by ochotona » Fri Mar 29, 2019 8:34 pm

The GEM Dual Momentum is in equities for April 2019.

I tried to sit out March in order to get a better price, but I was unable to take advantage of the dips I did get. I'll be going back in with a very light 25% allocation to the Schwab dividend ETF, SCHD.
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Re: Tactical Asset Allocation + HBPP an intriguing combo

Post by Kbg » Sat Mar 30, 2019 9:10 am

April is 60 us/10 intl/30 bonds
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