Pauling is one of several portfolios that lag their benchmark. When this is the case I go to the Risk Ratios to see the direction of the growth or regression. In which direction is the portfolio moving with respect to the broad equities market? This is not an easy time for money management as we have a cruel administration that seems to find glee in throwing sand into the economic and social gears of society. This being the case, I am playing it safe by moving new money primarily into short-term treasuries (SHV). Along the way, if excess cash becomes available, I am setting a few limit orders for VOO priced anywhere between 3% and 5% below the current price.
Pauling Security Holdings
Below readers will find the current holdings in the Pauling portfolio. Recently I sold all shares of SCHG and moved the cash into SHV. This morning I picked up five more shares of SHV so I continually build the portfolio, but do so in a conservative manner.
Pauling Performance Data
As mentioned above, the Pauling is one of the poorer performing ITA portfolios. The delta difference is even much greater when one compares the IRR value with the IRR of the S&P 500 (SPY). When the IRR is disappointing, I look to the Risk Ratios with the hope of finding a few “bright lights.”
Pauling Risk Ratios
When a portfolio is in the dumps, is it making any positive headway? Recently I moved the Pauling to a very simple asset allocation plan. Now we need to see if this asset allocation change is working. The Sortino Ratio is improving – a positive signal. Since the asset allocation move in early March the Jensen Performance Index is improving. That is significant. Of concern is the decay in the Information Ratio. Keep an eye on this metric as we finish out the year.
If the equities market continues to improve my decision to go conservation will be a mistake. As least I am protecting capital.
Questions and comments are always welcome.
Pauling II Asset Allocation Portfolio Launch: 1 April 2024
Pauling II Update: 1 April 2024
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