A reader asked: "Do you rebalance your strategy each month even if the ETF picks remain the same? For example, if QQQ is the pick one month, then pops up as the pick for the next month, do you take profits and rebalance? Or do you just leave it alone?" Short answer: Leave it alone. But there are exceptions (read on). The following chart and table shows the performance of The 12% Solution for the full year 2023. Our benchmark for this post is SPY, the popular ETF that mirrors the S&P 500 index. While much of the year had been neck-and-neck, SPY pulled slightly ahead in the last two months. That is, assuming we rebalanced on the first day of the month. If we had adhered to the book and rebalanced at the close of trading on the last trading day of the month, our strategy would have taken the lead - slightly. Let's get the details... A reader asked: "Artificial Intelligence (AI) is the next big growth area. Does your strategy see that coming, and is it adaptable enough to take advantage of that trend?" Short answer: yes. In fact, you can watch the new YouTube video: AI - Can The 12% Solution Play That Trend? And while you there, subscribe to the channel so you won't miss future videos. But for those who would prefer to read, here’s a little more detail… A reader asked: "Hi David, was just curious on your core strategies; have you ever tried back testing methodologies on a weekly rather than monthly time frame? Curious if there was any edge to be found on drawdown or upside." The following chart and table shows the performance of The 12% Solution for 2023 YTD (through October 31). Our benchmark for this post is SPY, the popular ETF that mirrors the S&P 500 index.
While much of the year has been neck-and-neck, our strategy has pulled ahead in the last two months. This, while the S&P 500 has suffered a correction (at least 10% down from the most recent high). Let's get the details... Warren Buffett (CEO of Berkshire Hathaway) is perhaps the world’s most successful stock investor. But does he recommend individual stock picking for the average investor? Actually, no. Quite the contrary. A reader asked: "To hit the mark at the close of the last market day of the month, wouldn't I have to place my trades in the after-market hours when the trading is thin? Or should I just trade during the first trading day of the new month? If the latter, exactly when? For example, the first hour of trading can be volatile." A reader asked: "With the 12% solution are there any issues with using a Roth IRA account that has 1 to 4 million dollars?" The following chart and table shows the performance of The 12% Solution for 2023 YTD (through July 3). Our benchmark for this post is SPY, the popular ETF that mirrors the S&P 500 index.
While much of the year has been neck-and-neck, our strategy is beginning to pull ahead. Let's get the details... It's been one year since we last made this particular comparison. The following chart shows the total return for The 12% Solution strategy from 2008 to 2022 (last full year). Our benchmark for this post is VBINX, the Vanguard mutual fund offering the classic balanced allocation in one play: 60% stocks, 40% bonds.
So what does this match up look like? |
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May 2024
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