Pauling is an asset allocation driven portfolio with leanings toward “recession proof” if there is such an allocation. Seventy percent of the portfolio is currently held in short-term treasuries and this is by design. Should we see a 10% draw-down or what is classified as a correction, I will begin to sell some shares of SCHO and begin to nibble at asset classes most under target.
Pauling Security Holdings
Below are the current securities held in the Pauling. I may sell one of the gold ETFs and narrow it from three to two. For now I am still including bonds (BND) as a possible asset class, but will likely eliminate it as bonds are not projected to do well should we see a decade or two of Financial Repression.
Pauling Rebalancing Recommendations
The screenshot below shows how the portfolio would look were I to bring all asset classes close to target. With a market that is highly overvalued or overbought, I am standing pat with short-term treasuries (SCHO).
After uploading all the screenshots I purchased shares of VIS as Industrials are oversold. That investment does not show up in this blog post.
Pauling Performance Data
Since 12/31/2021 the Pauling lags the AOR benchmark by a significant percentage. Expect this delta to continue if the market moves up. Should the market moves down, as anticipated, the Pauling will hold value.
Pauling Risk Ratios
With exception of the critical Information Ratio, the Pauling risk measurements are all above where they were a year ago. The slope of Jensen Alpha is positive, but barely.
Financial Repression Portfolio: Part V
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