Kepler definitely requires more decisions than the McClintock portfolio updated a few hours ago. As one of the Relative Strength portfolios, the Kepler is following the Buy-Hold-Sell (BHS) investing model. In the following analysis I’ll show the current investment quiver, BHS recommendations, risk controls, performance data, and the latest risk ratios.
One of the first decisions in this analysis is to know what to do with the available cash. When I began writing this blog the cash exceeded $50,000.
Kepler Investment Quiver
Below are the current holdings for the Kepler portfolio. Since I began writing this blog, all shares of VTV and VOE were sold out of the portfolio as well as 75% of VTI.
Kepler BHS Recommendations
With the investment model set to BHS and using the default look-back LRS1 and LRS2 combinations, the recommendation it to Buy or continue to hold VUG, VNQ, TLT, QUAL, and QQQ. It looks like TLT is somewhat of an unwanted visitor and likely rose to the top five due to the recent erratic market. TLT should provide a little stability to an otherwise uncertain market.
Kepler Manual Risk Adjustments
Once more I adjusted the SD Multiplier so the Stop Loss for VTI is a conservative 5.0%. Other risk adjustments were set so the over portfolio has a risk around 5% to 6%.
Limit orders are in place so as to meet the Shares Required recommendations.
Kepler Performance Data
The following data runs from 7/31/2019 through mid-morning of 7/16/2021. With an IRR of 15.2% the Kepler is matching the VTHRX benchmark.
Kepler Risk Ratios
As for how the portfolio is performing based on market risk, an appropriate benchmark, and a low risk-free interest rate, the Kepler is turning out a very high Jensen value. It is also reassuring to see the slope reach the magic number of 1.