Millikan Portfolio Review: 27 July 2026

“Bottoms in the investment world don’t end with four-year lows; they end with 10- or 15-year lows.” — Jim Rogers

Millikan is the “recession resistant” portfolio up for review this morning. Before diving into the analysis let me attempt to write down a few ideas when trying to deal with this high market. “How should I prepare for a possible recession or at least a market correction?”  Corrections happen nearly every year so those are relatively easy to endure.  Events such as the Great Recession or the Viet Nam Recession are a different story.  Longtime readers know I am a fan of security diversification as well as portfolio management diversification.  Here are a few suggestions and these will vary depending on risk tolerance and the age of the investor.  Assume one does not need to withdraw funds for living expenses.  Even so, none of us likes the idea of losing capital.

• My first suggestion is to set up a Robo Advisor portfolio with a reputable firm such as Fidelity, Vanguard, Schwab, etc.  An example portfolio on this site is the Schrodinger.  Check out that portfolio and see if it meets your needs.  The Schrodinger is aggressive in that 80% is invested in equities.  Feed this portfolio each month in order to take advantage of dollar-cost-averaging.  Then stand back and let the computers do their work.
• Build an asset allocation portfolio similar to the Millikan, Bohr, Bethe, etc.  With the market this high, invest at least 50% of the portfolio in short-term treasuries such as SHV, SCHO, or SGOV.  Think of these ETFs as cash holding securities.  When the market drops 10% begin to pick up shares in an effort to rebalance the portfolio.  I will walk readers through this process in a moment with the Millikan.  As the Millikan currently stands, approximately 50% of the portfolio is invested in short-term treasuries and dividend oriented ETFs.  TIPS is another place to park excess cash.
• I’m reluctant to recommend the Sector BPI investment model as it is too complicated for most investors.  However, I am very high on this investing model as it provides ample protection against losing large chunks of capital.
• Keep the dollar amount in checking accounts to a minimum as large cash holding lose buying power.  Invest available dollars in SGOV or SCHO so as to keep the money working.  The 3.9% dividend is better than a poke in the eye.

Millikan Security Holdings

Below are the current holdings in the Millikan portfolio.  Note the high percentage in SCHO as well as VIG, which is also above target.  By this time the next review rolls around I will most likely hold more shares in the two TIPS, SCHP and STIP.  This will raise the dividend income to something above 3.0%.

Millikan Rebalancing Recommendations

As for rebalancing, I am waiting for a better buying opportunity before purchasing more shares of U.S. Equities (VTI).  Meanwhile, I am building up SCHO and dividend oriented ETFs such as SCHD and VYM.

As mentioned in the intro, excess cash is invested in SCHO and ready to move into higher volatile securities if and when the market corrects.

Millikan Performance Data

Since 12/31/2021 the Millikan portfolio has outperformed the AOR benchmark and is not that far below other aggressive benchmarks such as the S&P 500 (SPY).

Millikan Risk Ratios

Over the past year the Millikan has not kept pace with the AOR benchmark when risk enters the equation.  We see this in the slope of Jensen as well as the lower value of the Information Ratio.  Both ratios are well below where they were a year ago.

If the broad market continues to rise the Millikan cannot keep pace as it is carrying such a high percentage in several low volatile securities.  This portfolio is set up to resist any kind of correction or worse.  There is a price to be paid for this conservatism in a bull market.