Darwin Portfolio Review: 12 December 2025

Riverboats, Bangkok, Thailand

As we wind down a year that has been generally bullish, following the 20%+ pullback in prices resulting from reactions to the tariff scare in March, we are consolidating near all-time highs in the SPX (S&P 500 Index) with resistance being seen at ~6900 level:

Whether we break through this level in 2026, or we see a controlled pullback, we will have to wait to see – but the market does seem to be a little over-extended at this point, even as we continue to trade in a bullish channel.

US equities closed the week slightly lower than last week’s close leaving them in the center of the pack of major asset classes:

Gold picked up a little steam again, after a short pause, and has been the biggest gainer this year generating 60%+ returns. Oil has been the weakest Commodity/Sector/Asset Class over the year despite some nice gains in the May/June period. Equities, generally, have performed well over the year with Emerging Market and Developed Market assets outperforming their US counterparts (by almost 2:1) suggesting that diversification would have benefited portfolios holding these assets. Of course, diversifying with Bonds would have had the opposite effect with Bonds being a weak performer. Performance of the AOA fund – that holds all global equity classes, together with Bonds – is a good example of the impact of diversification, and this fund is showing returns slightly ahead of US equities, although not significantly so – but with lower volatility (risk).

The Darwin portfolio is a portfolio of diversified assets that is actively managed (rather than holding fixed asset allocations) in an attempt to beat the AOA fund. Although I lost all my performance graphs when I tried to transfer my files to a new computer about 2 months ago, performance since that time looks like this:

as we consolidate near the current all-time highs.

As I have mentioned in previous posts I shall be switching to a new algorithm for 2026 but the portfolio “quiver” will remain basically the same – although I will likely add an inverse equity ETF, to provide an alternative to hedging with Options, since I know most (if not all) readers of this blog are not comfortable trading Options.

Current recommendations from the workbook/algorithm used to this point look like this:

with the ETFs currently held (SPLG and EEM) showing Hold recommendations. Since I plan to switch models within the next 2 weeks I am not making any adjustments until I do so and the current “Cash” balance is held in BIL (short-term T-Bills).

If I can finish some back-testing I hope to be able to show an example of the new model/workbook soon.