Galileo Dual Momentum Portfolio: 14 January 2022

Strolling pair in Crystal Springs

There is no change in the Galileo recommendation.  Continue to remain at the same level or 100% invested in VTI.  While the following data is based on 1/13/2021 prices, I updated the Kipling this morning and there is no change in this Dual Momentum™ portfolio.

Galileo Dual Momentum Recommendation

Using the DM investing model and the default 60- and 100-trading days look-back combination (green arrow), the recommendation to remain invested in VTI has not changed.  There is still insufficient cash to purchase another share of VTI.

A pure Gary Antonacci portfolio would only include VTI, VEU, and BND.  I’ve added TLT as another option for times when equities, be they U.S. or International, are out of favor.

Galileo Performance Data

Earlier I thought the negative values for VTTVX and VTHRX were an error.  After looking at prices on Yahoo it came as a surprise that these target mutual funds are actually losing money.  VTI has also lost money over the last month, but at a slower rate.

Galileo Risk Ratio

When the Galileo, or any of the DM portfolios, are fully invested in VTI, the portfolio beta is very close to one and this impacts both the Treynor and Jensen ratios.  However, the Jensen Performance Index (frequently called Jensen Alpha) is not affected to the same degree.  Just one of the reasons why I favor the Jensen over the Treynor.

With Dual Momentum portfolios one expects to see more volatility in the Treynor and Jensen curves.  That is why I pay considerable attention to the slope (0.69) of Jensen’s Alpha.

Let your eyes run over all the data values.  There is not one negative number in the bunch.  This is rather remarkable and is certainly not true for all ITA portfolios.

This latest data places the Galileo in 11th place based on IRR values and #9 when risk is part of the equation.  Once all portfolios go through their January reviews, I expect the Galileo will move up in the ratings as December and early January have not been great days for the equities market.

There are four Dual Momentum™ portfolio tracked here at ITA.  They are:  Galileo, Franklin, McClintock, and Pauling.  When setting up a family portfolio, I highly recommend one of several investing models be a DM style portfolio.  A second recommendation is to use a Robo Advisor as is the case with the Schrodinger.  A third, and one I may not have mentioned before is to invest only in VTI or SPY and do nothing else.  This is my recommendation for a young investor just beginning their working career.  Open up an account with Vanguard, purchase as many shares of VTI as cash permits and keep this up month after month.  One more recommendation.  Max our your Roth IRA.