Gauss Asset Allocation Portfolio Review: 8 October 2025

Moon Rise of 17th Street

Gauss is another Asset Allocation (AA) portfolio that is in the middle of the rebalancing process.  The goal is to have all the AA portfolios close to balanced before we enter 2026.  In all cases I am reducing exposure to U.S. Equities as this market is far overvalued.

Gauss Asset Allocation Model

Forty seven (47%) is still allocated to U.S. Equities.  Even this percentage may be too high so I may adjust the asset allocation percentages before the November review.  I’ll see if I can find a few more YouTube videos that go into the numbers behind this overbought stock market.

As readers can see, the Gauss holds a high percentage in cash.  I have numerous limit orders in place to purchase shares at prices significantly lower than current prices.  This is a good time to be patient and wait for a major draw-down.

Gauss Rebalancing Recommendations

One place I am increasing shares is developed international equities (VEA).  Another place is emerging markets (VWO) as this “sector” is undervalued.

Gauss Performance Data

Since 12/31/2021 the Gauss has performed very well.  Only two equity only benchmarks are doing better than the Gauss.  As readers can see, this portfolio is besting the AOR benchmark by a 2 to 1 margin.

Gauss Risk Ratios

Once we clear January the slope of the Jensen Performance Index should be positive.  We have see consistent growth in the Jensen since last February.

The Information Ratio is much higher than it was a year ago.  This is significant.

BRICS is now challenging the G7 for GDP dominance.  In fact the GDP of BRICS is now larger than the GPP of G7 by several percentage points.  Ten countries make up BRICS and they are:  Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russian Federation, South Africa and United Arab Emirates.  The power houses are Brazil, China, and India.

“Central to this situation is the US trade war with China, as well as US sanctions on China and Russia. Should the BRICS establish a new reserve currency, it would likely significantly impact the US dollar, potentially leading to a decline in demand, or what’s known as de-dollarization.”

Buffett Indicator & Shiller PE Ratio