Kepler Portfolio Review: 22 August 2023

Hiking in Arches National Park – Utah

Carson was the portfolio up for review this morning, but the owner withdrew cash and I don’t want to review the portfolio until that transaction is complete.  Therefore, I am moving the Kepler up one day for this update.  The market opened mixed this morning so the changes will rely on the recommendations coming out of the Kipling based on price changes since the last review.

Kepler Investment Quiver and Holdings

Below readers will view the investment quiver and the current holdings.  There is considerable cash available and I’ll explain how I plan to handle that money.

The investment quiver is similar to a Dual Momentum™ portfolio only with a few more investment arrows available.  The idea is to come close to reflecting the S&P 500 performance as this index is a difficult benchmark to surpass.  There is downside protection, something I am not employing with the Copernicus.  The Copernicus is a portfolio designed for the very young where the assets are not sold and new investments capitalize on the principle of dollar-cost-averaging.

Kepler Security Recommendations

Using the “default” look-back combination and the BHS investing model, no securities show up as a Buy.  All are either a Hold or a Sell.

Kepler Manual Risk Adjustments

With the SD Multiplier set to 1.17 so the Stop Loss percentage for VTI locks in at 8.0% and the Maximum Portfolio Risk adjusted to 6.0%, the recommendation is to sell 65 shares of VOO and 300 shares of VEA.  Rather than sell at market, I have TSLOs set for both recommendations.

In addition to the two sell recommendations I’ll be setting a number of limit orders to build BIL up to something close to 900 shares.  In order to reach the 900 share level VEA and VOO shares need to be sold.

Kepler Performance Data

Over the past 18.5 months the Kepler fell behind the SPY benchmark as well as the other five (5) possible benchmarks.  The hope is for the new concentrated investment quiver to close the gap between the portfolio IRR and SPY IRR.  For this to happen almost requires a major correction while the Kepler is holding cash.

Kepler Risk Ratios

Pay attention to the Jensen Performance Index.  Note that the value has shown gradual improvement in 2023.  Looking back to August of 2022, the values in every case are down.  If the market is at all positive over the next few months these risk measurements should improve.