Pauling Asset Allocation Portfolio: 21 February 2025

Somewhere in Florida

Pauling is an Asset Allocation portfolio holding a wide variety of ETFs designed to cover the globe.  A sizable percentage of the portfolio is allocated to international markets, something not emphasized within a number of other ITA portfolios.  Diversification is one of the key ingredients of this portfolio.

Pauling Asset Allocation Portfolio

The two primary asset classes out of balance are U.S. Equities (VOO) and a short-term treasury (SHV).  Several asset classes are above target.  The decision comes down to incurring a taxable event in order to rebalance the portfolio or just let the over target asset classes run.

Pauling Rebalancing Recommendations

Limit orders are in place to bring the various asset classes back into balance.  The limit orders are on the high side so as to increase profits.  The orders are sufficient high to where the above target ETFs are nearly left to run. In the meantime, fresh cash and dividends will be used to bring dividend bearing and low volatile ETFs into balance first.  Adding to SHV is a high priority.

Pauling Performance Data

Since 12/31/2021 the Pauling is lagging the AOR benchmark.  The gap can be closed, but it will take many months.  The Pauling has not been using the Asset Allocation model more than a few months so we need to watch the growth or decline of the Information and Jensen Alpha ratios.

Pauling Risk Ratios

While the Pauling is showing a strong slope of the Jensen, the decline since August is a concern.  A slight uptick since December is encouraging.  The goal is to keep the positive trend moving in an upward direction.  Judgment will need to wait until the portfolio is in balance for a few months to see how the portfolio design is working.

Next week will be a busy one with Copernicus, Bethe, Kepler, Franklin, and Bohr up for review as we close out February.