Topic
MyPlanIQ A "Value Stock"?
Have you run any tests to determine how the tactical strategies have performed when in a "value" mode or in an over-valued mode? By that I mean if you were to think of the MyPlanIQ tactical methodology relative performance as a stock price; returns compared to a benchmark say over a 3 year period (e.g.: 3yr MyPlanIQ tactical performance divided by the index performance....150% = a $150 stock price and 75% of the benchmark performance = to an $75 stock price).
If we make the logical assumption that based upon years of anecdotal and empirical evidence we believe the MyPlanIQ "stock price" should be $110 (average 3 year performance 10% greater than the benchmark - an arbitrary number that might not seem like much of a value add except if accomplished with significantly lower risk - lower risk = investor staying power), I can see where the $150 price would be a time to consider more strategic strategies and the $75 stock price a time to use tactical strategies.
Personally, I prefer to use time periods shorter than 3 years coupled with a moving average for entrance and exit points, but placing a "valuation" on the methodology might reveal times when it is best to focus on the use of tactical versus strategic.
What do you think?
If we make the logical assumption that based upon years of anecdotal and empirical evidence we believe the MyPlanIQ "stock price" should be $110 (average 3 year performance 10% greater than the benchmark - an arbitrary number that might not seem like much of a value add except if accomplished with significantly lower risk - lower risk = investor staying power), I can see where the $150 price would be a time to consider more strategic strategies and the $75 stock price a time to use tactical strategies.
Personally, I prefer to use time periods shorter than 3 years coupled with a moving average for entrance and exit points, but placing a "valuation" on the methodology might reveal times when it is best to focus on the use of tactical versus strategic.
What do you think?
stever asked · 11/10/2013
- #1
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The best data we have so far is the chart we had in our previous newsletter: December 10, 2012: How Asset Allocation Strategies Performed In Secular Market Trends.Admin · 11/12/2013 20:05:46
So if the following chart is any guide, either we will experience another roaring bull market such that the strategic will outperform the tactical or the tactical will outperform simply because of the end (or close to the end) of the bull market.
The chart for the rolling 5 year returns and/or 1 yr return:
- #2
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Also refer to today's newsletter: November 11, 2013: Tactical Asset Allocation In Overvalued Stock MarketsAdmin · 11/12/2013 20:07:57
Switching to the tactical in an overvalued market can improve returns while minimizing loss. The best time to use tactical is in an overvalued stock market.
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