Bethe is an excellent portfolio to begin the week as it is one of four passively managed portfolios with no trading activity over the past 33 days. The January review will likely differ as I expect some rebalancing to take place after the fourth quarter ends. At the very least, fourth quarter dividends will play a role in the next portfolio review.
Bethe Dashboard: Below is the Dashboard or Strategic Asset Allocation plan for the Bethe. Investors willing to take on a little more risk might consider the following adjustments:
- Shift a percentage currently allocated to Large-Cap Value (13.0%) down to Mid- and Small-Cap Value.
- Another possible shift is to lower the percentage allocated to Bonds and Income (18.9%) and increase Mid- and Small-Cap Value.
- A third possibility is to lower the percentage allocation to International Bonds (11.1) and increase Mid- and Small-Cap Value.
Bethe Performance Data: In another year the high IRR values will return to more reasonable values. Over the next few months take these annualized IRR values with a grain of salt.
With 29.9% and 6.2% assigned to Developed International and Emerging Market Equities respectively, it comes as no surprise the Bethe portfolio is lagging the ITA Index by 2.3% (-2.3%). Note that the VGTSX benchmark is -10.4% over the past two months showing international investments are a drag on the portfolio. It is times like this where the Dual Momentum model shines.
Passive investors are encouraged to follow this portfolio as it is an excellent model for buy and hold managers.