Dockside restaurant in Portland
Dividends and the possibility of the owner adding new money create the opportunity to rebalance Asset Allocation (AA) portfolios. The Pauling is getting there as most of the asset classes are within plus or minus one percentage point (1.0%) of the recommended target. VO and VB are above target, but I don’t plan to sell. Rather, I will continue to build up the asset classes most under target. Should VO and VB grow faster than the rebalancing efforts, so be it. One does not quibble with performance to the upside.
If the AA portfolio is less than $100,000 I try to keep the targets to 1.0% of the recommended value. If over $100,00 the target goals are plus or minus 0.5%.
Pauling Asset Allocation Portfolio
Below is the Pauling portfolio and only TLT is well below target. Cash is limited. Limit orders are in place to purchase several ETFs representing asset classes that are below target.
Pauling Rebalancing Recommendations
The sixth column from the right shows the limit orders in place in an effort to rebalance the Pauling. A few shares of VEA were purchased yesterday and a few more were purchased after I began writing this blog. Those will be accounted for in the January review.
Pauling Performance Data
Since 12/31/2021, or nearly three years ago, the Pauling lags the AOR benchmark by a significant percentage. It will be a real test of this AA model to close the gap on AOR.
Pauling Risk Ratios
Since July the Pauling has been moving in the wrong direction based on the Jensen Alpha risk measurement. The slope is only positive due to the slow start early in the year. Once the portfolio is in balance I will keep an eye on the Jensen. I may need to scale back the percentage allocated to real estate.
Huygens Asset Allocation Portfolio Review: 10 April 2024
Returning To Investing Roots: 5 August 2024
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