Preparation for breakfast guests.

Merry Christmas

Kepler is the last portfolio to be reviewed before Christmas.  This data is accurate as of the 23rd.  The owner of this portfolio needed cash during the recent bull market or not the best time to sell assets.  Now the portfolio needs to be replenished over the next few years.  If the volatility data is to be believed, there will be multiple buying opportunities if we are sufficiently patient to wait for the market to decline.

If you check the volatility data you see where equities generally have an annualized volatility of 12% to 15% each year while bonds bounce around the 5% level.

Kepler Asset Allocation Portfolio

I tweaked the Max AA percentages a smidgen by increasing the percentage in equities and reduced percentages in real estate and international equities.

We are getting close to having the asset classes in balance for the Kepler.  Rather than sell assets above target I prefer to concentrate on building up those assets below target.  This does not mean I will never sell profitable ETFs.

Kepler Rebalancing Recommendations

With a portfolio this small the goal is to keep the asset classes within plus or minus one percent of the target.  If all orders were struck the Kepler would have nearly all asset classes within the stated percentages.  We are getting close to having an AA portfolio in balance.

Kepler Performance Data

Kepler is one of the poorer performing ITA portfolios.  It is too early to criticize the Asset Allocation (AA) model as it has not been operational for a year.  By the end of 2025 we will have a better handle on the AA model.  If this model does not begin to show promise by this time next year I may well move it over to Schwab and set up a similar portfolio to the Schrodinger.

Kepler Risk Ratios

As we progress through 2025 keep an eye on the Jensen Performance Index (frequently known as the Jensen Alpha) and the Information Ratio.  Right now the Kepler is not keeping pace with the AOR benchmark and it declined significantly in December.

Questions and Comments are always welcome.