Category Archives: Asset Allocation

Hedge Funds Are Doing Well

Despite record outflows in 2016 and even a dose of the usual negative publicity, hedge funds have done well and the industry is looking forward to more growth. Based on performance data since 1977, hedge funds have outperformed the S&P … Continue reading

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Diversified Portfolio Performance in 2016

The Price Action Lab Diversified portfolio ended the year with a gain of 9% and ranked second best among 29 well-known portfolios.

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Trading Vs. Investing: The False Dichotomy

There are many who confuse these two: trading and investing. Some even offer trading disguised as investing. Even worse, some try to convince us that we should do one or the other. This clash is mostly motivated by marketing and … Continue reading

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Defending Financial Advisers

Due to the post-election stock rally many financial advisers and portfolio managers may have to defend themselves for having underperformed this year.  In this article, I provide a few lines of defense that can be used to calm unhappy investors.

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TLT Total Recall

After reaching a high of 20.5% last July, the TLT ETF year-to-date return just turned negative yesterday. Investors in passive stock-bond portfolios have watched part of gains evaporating after July due to the rally in bond yields.

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Do Nothing Fund Management: Another Distortion That Will Disappear

Another distortion, courtesy of the low interest rate policy of the Fed, that is now way overextended and serves political goals is the “do nothing fund management.” Market timers are being replaced by accountants because fund management boards think the … Continue reading

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The 60/40 Passive Allocation is Holding Strong In A Rough Market

Despite calls for its death in mainstream financial media earlier this year, the 60/40 portfolio in stocks and bonds is holding strong. A decrease by about 350 basis points from peak year-to-date return is due to the rise in correlation … Continue reading

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Comparison Of Two Strategic Portfolio Allocations

We compare the performances of Golden Butterfly and Price Action Lab Diversified Portfolio strategic allocations. Despite any apparent differences, the performances of the portfolios are statistically indistinguishable.

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