Custom Timing Portfolio - Q1 Performance
Beating the S&P 500 with virtually no effort? Yes, please.
Market timing is a terrible idea for most, but a reasonable idea for some. Adding timing to your portfolio can help you if you follow a systematic strategy, have reasonable expectations for returns, and want less risk without permanent hedging positions.
In the finale of my 3-part series on timing, I offered my own customized investment strategy that would rely exclusively on momentum-based timing and not-at-all on human opinions or emotions. How is that portfolio doing? Many of you (OK, just two of you) asked for an update.
Since inception (8/3/2020), the portfolio is up 9.11% compared to 6.99% for the S&P 500 index.  The chart below is from Folio Institutional, which is the brokerage firm I have this strategy in.
The market-beating performance (so far) has been exclusively due to MTUM’s status as the world’s greatest all-around ETF. That position has not been challenged in 2020 and I fully expect it to continue pummeling the broader market into oblivion as it has done since Index inception. Will that actually happen? I have no idea. But it’s off to a decent start.
Has It Gone to Cash?
So far, there have been no cash moves. The portfolio has remained fully invested the entire time. We got close-ish a few times, but nothing bad enough to trip the model into a defensive position.
Remember, the strategy is geared towards minimizing (not avoiding entirely) large-scale market collapses. It’s not designed to avoid corrections at all.
Has It Been Easy to Manage?
One of my criteria for a timing strategy was that it be easy to manage. And that’s definitely been the case. I’ve literally done absolutely nothing for 3 months. Doesn’t get much easier than that…
What Do the Signals Suggest Now?
Based on the formula outlined in my strategy post, everything remains positive. Unless the market signals deteriorate in a meaningful way, I’d expect the timing strategy to remain fully invested for the entirety of November and into early December.
DISCLAIMER: Dividend Growth Machine, LLC is not a registered investment advisor or broker/dealer. All information provided in this article and on the Dividend Growth Machine website is provided for informational purposes only. All opinions provided in this article are based upon sources believed to be accurate and are written in good faith, but no warranty, representation, or guarantee, whether expressed or implied, is made as to the accuracy of the information contained herein. Nothing in this article or the Dividend Growth Machine website constitutes a representation by the publisher or a solicitation for the purchase or sale of securities. Past performance is not an indicator of future performance. Please contact an investment professional if you have any questions regarding an investment.
Data source: Folio Institutional. This is a real-life investment portfolio. I’ve got my wife’s IRA invested in this strategy ↩
Hi Nathan- I can't figure out how to contact you directly. How do I become a "paying member" so I can access the locked articles?
Nathan - any concerns with MTUM changing the underlying index it tracks?