Einstein Asset Allocation Portfolio Update: 5 December 2025

One of numerous Snowmen – Canby

Einstein is one of several portfolios set up to resist major market draw-downs.  Should we encounter a recession in 2026 there is likely no place to hide other than to short the equities market.  Historically the stock market trends up so shorting the market is definitely bucking the long-term trend.  This is why I don’t plan to short the market.  Instead, I am setting the Einstein up to lower exposure to equities and to tilt the portfolio toward low volatile securities.

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Einstein Asset Allocation Recession Model

Below is the asset allocation model for the Einstein.  It will take time to bring the various asset classes into balance and I am not inclined to purchase ETFs that are not recommended for purchase.  See the next screenshot.

Einstein Rebalancing Recommendation

The sixth column from the right shows the number of shares for which I have limit orders.  If more asset classes show up as a Buy by the next review, I will sell shares of SHV to raise sufficient cash to make the purchases.  Once an asset class is within range of the target I don’t plan to sell shares, but will continue to add to asset classes most below target.  This is classic asset allocation modeling.

Einstein Performance Data

Since 12/31/2021 the Einstein has been one of the poorest performing portfolios.  As readers may recall, the owner needed to withdraw funds for education and that move came at just the wrong time.  Hence, performance is below expectations.

Einstein Risk Ratios

With the Internal Rate of Return (IRR) below average we will be watching how the Jensen Alpha performers with the revised asset allocation mix.  We see slight improvement since last August.

Don’t pay too much attention to the Treynor as it is heavily dependent on the portfolio beta and is the least important of the four risk measurements.

Recession: Will Equities Drop In The Next 18 Months?

Note that Discretionary moved into the overbought zone so place a 3% limit under the appropriate sector ETF.