February 10 – All Weather Portfolio

Asset Class Overview:

Stocks finished lower, on the plus side volume was lighter as investors watched developments in Greece and Ukraine. The Nasdaq and the S&P 500 dropped 0.4% each and the Dow Jones industrial average fell 0.5%.


Gold and the yen advanced, it is a demand for haven assets as Greece’s rejection of its bailout terms fueled concern over the prospect of fresh turmoil in the euro area. Crude oil rose.

The Stoxx Europe 600 Index slid 0.7 percent, while Greece’s three-year bond yields increased to the highest level since the nation’s debt was restructured in 2012. Greek Prime Minister Alexis Tsipras vowed to negotiate an end to the austerity program before talks with creditors, as European leaders urged him to pare back his ambitions.

Among stocks moving Monday, Johnson & Johnson tumbled 1.3 percent after the Swiss National Bank cut its holdings. Oil’s rally led to declines among consumer shares. Alcoa Inc. fell 5.6 percent after JPMorgan Chase & Co. downgraded its rating. Utilities in the S&P 500 sank 0.9 percent after falling the most since 2011 on Friday as Treasury yields rose.

OPEC on Monday cut its forecast for U.S. oil production this year as lower prices curb drilling. Oil may drop more than 50 percent to “the $20 range” by the start of the second quarter as oversupply fills storage tanks close to capacity, according to analysts at Citigroup Inc.

Sector Watch:

Let me apologize for their being not commentary here. I operate with two computers and I posted these notes with commentary. Then I went on the second computer where this post was opened but not complete. I hit accidentally to update  😳 The commentary was missing.




All Weather Portfolio

A while ago I talked a bit about Tony Robbins book MONEY Master the Game: 7 Simple Steps to Financial Freedom. I referenced specifically and interview with Ray Dalio on his All weather portfolio. Evidently that post, article and video struck home with one of our members, a long time member who has been with this site since the very beginning.

Paul took that article/video and ran with it. After watching the interview on the net I checked out Tony’s book and the portion covering Ray Dalio’s portfolio system. I purchased the book so that I could get as much as possible of Ray’s complete All Weather Portfolio.

I have since put together a portfolio that is fairly close to Ray’s All Weather Portfolio using the eleven SPDR’s as stock, TLT, IEF, GSC & DBC for commodities , and GLD for gold. I have recorded the monthly opens for the above since 11/1/07 along with the SPY, thinking that it could replace the eleven SPDR’s. To establish a trading signal I have used a trailing stop that uses 10 ATR period with a 2.1 ATR factor, which I worked out trying to model it after the one you use.

After completing the study using the SPDRs as stock I did one using the SPY as stock. My study over the 11/07 to date period shows a gain of a little over $150,000.00 increase in the portfolio while the one using SPY has a$110,000.00 increase.

One problem I have with what I did is that when I sold out of an issue I used the open of the next month and that might not be as accurate as getting out on the last day of any particular month. Editors Note: {Paul that is the correct way. The signal is generated on the close of the month, the fills on the open of the next month.] Another issue is that when I got out I assumed the funds were held in cash with no income.

My reason for sending you this information is just to say thank you for helping me to see that slow & steady can do very nicely.

Paul, we all thank you!

Slow and steady wins the race. 😎

Economic Reports and Earnings:

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