Pauling Portfolio Review: 30 April 2025

Garage Sale Item

Pauling is another asset allocation portfolio managed using only four Exchange Traded Funds (ETFs).  Only two months of data is in the bank for this portfolio so it is much too early to know if this model is working as hypothesized.  The makeup of the Pauling is not all that different from the Copernicus.  The Pauling is designed to be a tad more conservative than the Copernicus by holding SCHD and a larger percentage in SHV.

Pauling Security Holdings

Below is the current makeup of the Pauling.  I have TSLOs set for SCHG and VOO as we are operating in an uncertain and chaotic market environment.  As yet we don’t know to what degree the tariffs will slow the economy.  I suspect it will have a rather dramatic impact by this fall.  These TSLOs are designed to protect capital – the wish of most investors.

Pauling Rebalancing Recommendations

Only SHV is currently showing up as a Buy.  This morning I purchased a few shares of SHV to use up available cash.  The limit orders are set around 2.5% to 3% below current prices.  I received notification from Schwab that the down market today triggered a few sales of SCHG in other ITA portfolios.

Pauling Performance Data

Since 12/31/2021 or early 2022 the Pauling continues to trail the AOR benchmark by approximately two percentage points annualized.  It will be difficult to make up this difference.

Pauling Risk Ratios

Most of the risk metrics are above where they were last year, but the recent market is placing downward pressure on both the Jensen Performance Index and Information Ratio.  These two risk measurements are highly correlated.  My definite favorite is the Jensen as it is made up of four different market/portfolio factors.

Once the data clears July the slope of the Jensen will likely turn negative.

“Sell In May And Go Away”