Hibiscus bud. Check out the little creature hiding in the one or two o’clock region.
Reviewing or updating asset allocation portfolios such as the Pauling is always interesting as there are generally a few small tweaks required. If something need attention it is due to new cash deposits, dividends of some significance were declared, or prices among the different asset classes changed. Nearly every month there is activity among these three variables, particularly at the end of a quarter when dividends are paid.
The Pauling is the first of the seven asset allocation portfolios to approach what I call in-balance. The tweaks this month are minor. Limit orders are in place.
Pauling Asset Allocation Holdings
Below is the investment quiver and the holdings in the various asset classes. Domestic Real Estate (VNQ) is out of balance to the upside, but rather than sell and incur a taxable event, no changes are planned as I want to capture the full measure of dividends at the end of this month or third quarter dividends.
Initially my goal was to keep all asset classes within 0.5% of the Maximum AA percentage. That may be difficult to accomplish. At the very least I will attempt to keep asset classes within 1.0% of the recommended percentage or the percentages found in the third column from the left.
Pauling Manual Risk Adjustments
U.S. Equities (VTI and VOO) and developed international equities (VEA) are asset classes most below target. With limited cash those are the asset classes I will focus on to bring back into balance.
Pauling Performance Data
While the Pauling has only been using the AA model for a few weeks, the results since 12/31/2021 show the portfolio lagging the AOR benchmark by approximately one percentage point. It will be interesting to see how this model compares with its new benchmark over the next few months.
Pauling Risk Ratios
On a risk adjust basis the Pauling has not performed well over the past year. This is one of the reason for moving it over into a more traditional asset allocation investing model. The one bright light is the positive slope value (0.39) for the Jensen Alpha.
The Copernicus, the top performing portfolio, will be update later this week.
Returning To Investing Roots: 5 August 2024
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Just in case you missed my post in the Forum about price data sources, the Investment Account Manager software is adversely impacted by Yahoo closing the door on security price access. The IAM software is now useless until the download data problem is solved. I am in contact with the IAM developers, but so far there is no solution.
We can make the Kipling spreadsheet work by using the Tiingo Adj. Price option. However, I don’t know how the IAM developers are going to solve this problem. It is akin to owning a restaurant and the outstanding chef walks off the premises.
The Copernicus is up for review on Friday. At this point it will be a truncated review.
Lowell