Galileo is the first portfolio to be reviewed in the second half of 2021. The Galileo is one of several Dual Momentum™ portfolios and thus far this investing model has been one of the most successful. In addition to doing quite well, DM portfolios are easy to manage. Second to the Robo Advisor account (Schrodinger) and the Bohr Asset Allocation portfolio, Dual Momentum portfolios are by far the easiest to oversee.
Should the Internal Rate of Return (IRR), Jensen Performance Index, and Jensen Slope continue to hold up well for DM portfolios, I’m seriously considering shifting a few of the BHS-HA-LRPC managed portfolios over to this simpler investing model. I’m not recommending this change just yet as I need more data before making such a move.
Galileo Dual Momentum Recommendation
The recommendation is to sell 27 shares of VTI and purchase 55 shares of VEU. These orders will be set later this morning. The red arrow on the left indicates the look-back combination I’m using with the Galileo.
Galileo Performance Data Since Inception
Since inception means starting at 4/30/2017 as that is when I first began recording Investment Account Manager (IAM) data for the Galileo. The portfolio is actually older. As you can see below, the Galileo is outperforming all the benchmarks going back over four years. This data comes from the Investment Account Manager software, a commercial portfolio tracking program.
Performance Data Since 7/31/2019
July 31, 2019 is the “common launch” date as that is when the youngest ITA portfolio was launched. By using this as the starting date I am able to normalize all the data for the different portfolios.
Once more, the Galileo holds a substantial lead over all the benchmarks. Now we need to examine how the Galileo is performing based on the risk of the portfolio.
Galileo Risk Ratios
Looking back over a year of data it is rather remarkable to see all positive numbers. This is rather rare.
Interest rates are low and the IRR value is high with respect to the benchmark. That is why Jensen’s Alpha or Performance Index is so high. This kind of performance tends to attract one to the Dual Momentum model.
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