Tactical Asset Allocation Monthly Feature – July 2012

Thursday, July 5, 2012 | Leave a comment

Below are the most up to date allocations for the Tactical Asset Allocation model I’ve written about on the blog.  For those needing a refresher on what TAA is and why I think it’s important as part of an investment plan just click here to revisit the first post.

US Stocks (Vanguard Total Stock Market ETF as proxy)International Stocks (Vanguard Total International Stock Market ETF as proxy)Bonds (Vanguard Total Bond Market ETF as proxy)Real Estate (Vanguard REIT ETF as proxy)Gold (SPDR Gold ETF as proxy)Cash
September 20110%55%7%38%0%
October 20110%62%0%38%0%
November 20110%60%0%40%0%
December 20110%58%0%42%0%
January 20120%71%0%29%0%
February 20124%57%9%30%0%
March 201217%58%12%13%0%
April 201217%55%18%10%0%
May 201216%61%23%0%0%
June 20125%69%26%0%0%
July 201213%61%26%0%0%
August 201213%62%25%0%0%
September 201217%58%25%0%0%
October 201218%55%18%9%0%
November 201221%59%15%5%0%
December 201222%57%17%4%0%
January 201319%54%15%12%0%
February 201325%50%17%8%0%
March 201323%54%19%4%0%
April 201324%52%22%2%0%
May 201320%56%23%1%0%
June 201329%55%15%1%0%
July 201330%50%12%0%8%
August 201330%50%7%0%13%
September 201330%17%50%0%0%3%
October 201327%24%50%0%0%0%
November 201329%21%50%0%0%0%
December 201329%21%50%0%0%0%
January 201430%18%50%0%0%2%
February 201425%15%52%8%0%0%
March 201429%14%51%6%0%0%
April 201430%11%52%4%0%3%
May 201419%13%53%15%0%0%
June 201414%4%69%13%0%0%
July 201416%14%54%16%0%0%
August 201418%10%55%17%0%0%
September 201428%0%57%15%0%0%
October 201421%0%55%24%0%0%
November 201418%0%55%27%0%0%
December 201415%0%56%29%0%0%
January 201511%0%57%30%0%2%
February 201520%0%56%24%0%0%
March 201520%0%55%25%0%0%
April 201515%0%55%30%0%0%

In the 10 months I’ve freely shared this model on my blog it has proven to provide a balanced way to achieve growth, while also managing the risk of April/May/June also.

June was a great month for the model with Real Estate leading the way.  Having a modest exposure to stocks and a hefty dose of bonds muted the early month volatility.

The model still has no gold, which has served it well the past few months.  For July the model is not changing significantly, but is taking some of the bonds off the table and adding to stocks.  All in all the model will be nicely balanced for July with adequate risk aversion while still having enough growth exposure that should stock and real estate move higher – so too should the overall allocation.

Since the model I share here is “balanced” keep in mind it always keeps at least 50% of the portfolio in either bonds or cash.  The whole idea of this balanced tactical asset allocation (TAA) approach is to keep a highly diversified portfolio that can get through the markets major ups and downs without the dizzying volatility of just growth investments.  It’s not perfect, but so far so good.

For those that want to track the performance of this model here’s the most up to date info:

Balanced Tactical Asset
Allocation Model
50% Total Stock Market
50% Total Bond Market
2015 (ytd)2.13%1.26%

I’ve also added some long term metrics on return and risk here (complete with data going back to 1997):

Balanced Tactical
Asset Allocation Model
50% Total Stock Market
50% Total Bond Market
Annualized Return
(6/1997 to 1/2015)
(5 Yr Standard Deviation)
Best Month4.84%5.85%
Worst Month-4.64%-10.06%

To see how performance is measured just check out the static page on TAA here.

As mentioned in past posts I’ll update this model/strategy each month roughly 1 week into each new month.  This way scalpers can’t just steal the research as their own and other financial professionals can’t simply use the research to manage their clients money.

If you like what you see here feel free to pass this on to others via email, use the Facebook icon below to share it there, or just suggest in personally to a friend.

Thanks for checking out this post and have a great day.


Jason Wenk

In Investing Seasonality Investor Education Tactical Asset Allocation | | |

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