Gauss Portfolio Review: 27 June 2025

Molalla River Bathers: ICM example.

Gauss is one of the mini-asset allocation portfolios or one where very few ETFs are used to populate the portfolio.  Since the last review all shares of SCHG were sold and the cash was converted to shares of SHV, a short-term treasury.  While U.S. Equities rebounded from the April depression point, the fundamentals that this is an over-bought market have not changed.  Review the Buffet Indicator and Shiller PE Ratio.  Both are very high, a warning of an overbought market.

Gauss Security Holdings

Below are the ETFs currently held in the Gauss portfolio.  As constructed the portfolio will throw off a dividend of 3.25%, or high by equity standards.  As currently constructed, the Gauss is a very conservative portfolio.

This is a wait and observe period.  The Gauss is taking a capital preservation path that is anything but a sure move.  Young investors should remain invested in ETFs such as VOO.  Ride out the highs and lows of the market as modeled by the Schrodinger and Copernicus portfolios.

Gauss Performance Data

Since 12/31/2021 the Gauss has outperformed all tracked benchmarks with exception of the S&P 500 (SPY).  Since SPY and the Gauss are quite close we will see over the next few months if this conservative approach was the right tack.  We need to be patient and see if tariffs and the “Big Beautiful Billionaire Bill” will have much of an impact on the broad economy.

Gauss Risk Ratios

Based on the June risk ratios, the Gauss is performing better than it was last year at this time.  The Jensen Alpha is well off its highs of last fall and that shows up in the Jensen slope (-0.30).

Comments are always welcome.