Ed Mamula.com

Another month where most of the models have arrived at the same decisions but in different proportions.  I did introduce a mechanism to choose between VTI and IWM, and all models but the Classic chose to switch into VTI for May and out of IWM.  Other than that, it is notable that all models but Classic are also allocating some money to bonds (IEF).  This is the first time this year that any models other than Timid (which always holds some bonds)  have held bonds, meaning that the models are getting a bit defensive…but the 10 year Treasury is sitting near 1.9% at the moment, so unless we make new lows on the 10 year yield, there won’t be much to gain from this IEF position.  Finally, I expect to change (or eliminate) the Composite measure soon.  The fact that it currently takes a vote from the Timid portfolio skews it too defensively.

Results for February, March, and Year to date without much commentary.  It’s much too early to start drawing conclusions, given that most of these systems have only been trading live since the beginning of the year.  Being up 12.1% through the first 3 months of the year is nice I suppose, but I had to use leverage to get there, while an unlevered VT returned 11.9%.  The bane of these models over the past2 and a half months has been that they are holding the Russell 200o (IWM) rather than the S&P 500 (SPY), and they have no provision for switching to large caps.   Of course, I just noticed that Decision Moose made just such a switch from small caps to large caps in  early March.  For the moment, I will not tinker with the A7 models; I will simply keep allocating the “US Equity” portion to the Russell 2000.