Pauling Portfolio Review: 22 April 2026

Barcelona Tourists

Pauling is an asset allocation portfolio that is undergoing a few reallocation moves in order to improve performance while taking action to prepare for a market correction.  The current low beta of 0.273 is an indicator as to how serious this portfolio is when the U.S. Equities market is at or near an all-time high.  The low beta is a drag in an upward moving market, but a plus when there is a draw-down.  The Pauling is setup to take advantage of a market correction.

Pauling Security Holdings

Below is the global diversification of the Pauling.  VTI and RSP cover all U.S. stocks.  VIG and SCHD are dividend producer while BND provides some bond exposure.  VEA and VWO cover international equities.  GLD and SGOL are the two gold ETFs.  I would not be holding these two gold securities if the stock market were close to an all-time low.

Pauling Rebalancing Recommendations

This morning the Pauling holds a high percentage of the portfolio in a money market or cash.  Limit orders are set for all ETFs shown to be below their target percentage.  Those percentages are located in the third column from the right.

Limit orders are set a few percentage points below the current price down to as low as 10% under the current price.  Most if not all the limit orders will be struck should we experience a market correction.  Correction is defined as a 10% pull back.  That possibility is highly likely before the end of 2026.

Pauling Performance Data

Since 12/31/2021 the Pauling continues to lag the AOR benchmark.  The 50% cash holding is not helping as the market continues to climb upward.

I am patiently waiting for some news event to slow this strong market.  The fundamentals do no merit this strong market as equities are overpriced.

Pauling Risk Ratios

When the Internal Rate of Return (IRR) is not keeping pace with the benchmark I look to the following risk ratios to see how the portfolio is performing when risk enters the equation.  Under the revised asset allocation plan the portfolio is moving ahead on three of the four ratios, but lagging on the very important Information Ratio.  The Jensen Performance Index is improving slightly and the slope is a modest positive at this time.

Comments are always welcome.

The Carson is scheduled for an update tomorrow.