Roadster Construction*
Since it has been a number of weeks since the last performance comparison update, a few explanations are in order.
- The portfolios are broken into groups depending on the investing model. Several portfolios are moving to different investing models. The next time this table is presented there will be changes in the groupings.
- The Annual IRR data is accurate as of 9/1/2023. Sortino, Jensen, etc. data is accurate as of the Date in the third column from the right.
- The far right column shows the Annualized Internal Rate of Return for the different portfolio groups.
- The launch date is 1/2/2022. While I have data going back to 2017 for a number of the portfolios, the youngest portfolio was launched in January of 2022 and I want to be able to compare performance over the same time period. A few of the portfolio actually have even longer histories, but data is not available for the very early years.
- Curie and Newton are included in the following table, but the reviews are no longer posted as the owners prefer the information remain private.
Portfolio Performance Comparisons
The following portfolio performance comparison table shows just how difficult it is to outperform the S&P 500 (SPY). Only seven of the 15 portfolios manage to do so.
Another standard that is difficult to outperform is the computer managed Schrodinger portfolio. Based on the Total Relative Weight Rank, only the Copernicus is doing better. These results give readers pause. Why all the effort when superior results can be obtained by investing in a Robo Advisor account with Schwab or what they call their Intelligent Portfolios. I don’t know if Schwab will employ Artificial Intelligence (AI) to their computer managed portfolios, but I would not be surprised if they were not working on such a model. AI should only enhance performance.
The only downside to the Schrodinger investing style is that it does not provide downside protection. This is not a big issue for young investors or those with 10 to 15 more years of investing as the market historically rebounds. The situation is a tad different for a retiree.
- The photograph of the roadster was made yesterday. I visited a friend is builds these cars using only the basic original body. To bring a roadster to completion takes approximately 2,000 hours.
If readers have questions related to the above table, post them in the Comment section provided below.
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What a lot of work, both on the roadster and on the 21 months of results for these portfolios, thank you.
Applying the “retirement downside protection” question to our situation, the Schrodinger looks very interesting, as it addresses the question of “who manages investments after I die?” As a practical matter, I wonder how splitting our investments into two portfolios, one a Schwab Intelligent Portfolio and the other following a Copernicus model could effectively be weighted and managed?
– 50/50?
– Quarterly rebalancing between the two?
– Some other “switching” trigger” applied to a 100% Schrodinger model?
All the best,
– Lee
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UPDATE: Upon further reflection, for me, the Copernicus model has already left the station. However, a tweaked Sector BPI Plus Model, such as Carlson or Franklin, might be a good counter-balance to a 100% Schwab Intelligent Portfolio approach.
Lee,
I’m still high on the Sector BPI Plus model, although I want to see how well these portfolios perform as the sectors rotate through oversold and overbought cycles. The model should keep performance from straying too far away from the S&P 500, a most difficult benchmark to beat.
Lowell