Gauss Portfolio Review: 28 May 2025

Schreiners Iris Garden

Gauss is another portfolio using a truncated asset allocation model or one where very few ETFs are used to populate the portfolio.  In other words – Keep it simple.  In keeping with caution in this uncertain economic environment, I placed a 4.5% Trailing Stop Loss Order (TSLO) under VOO and a 2.0% TSLO under SCHG.  I am more interested in hanging on to VOO than I am SCHG.  I will let SCHD ride for another month.  If new cash shows up through dividends or an influx of cash, shares will be added to SHV.  More shares were added to SHV this morning.

Portfolios such as the Gauss are very easy to manage.  Use a few broad based ETFs, set up your own asset allocation, and let the market do its work.  This approach is also more tax efficient assuming there is little trading.

Gauss Security Holdings

Below are the current securities that make up the Gauss.  Readers can see the emphasis placed on dividends or income.  By investing heavily in SHV the Gauss ends up as a low beta portfolio

Gauss Performance Data

Since 12/31/2021 or early 2022 the Gauss tripled the AOR and is also outperforming all other benchmarks tracked here at ITA.

Gauss Risk Ratios

The portfolio is more valuable this morning than it was a year ago.  See the Sortino Ratio.  With a low beta and the portfolio outperforming its benchmark, we expect to see improvement in the Treynor Ratio.  There has been significant improvement since May of 2024.  The Information Ratio is also growing in the right direction.

This leaves the Jensen Alpha Ratio, our most important risk measurement.  The Jensen is erratic at best.  It will be several months before we clip those high values from last summer.  Expect the slope to remain negative for the remainder of 2025 and even through the first quarter of 2026.

Returning To Investing Roots: 5 August 2024