Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, August 15, 2016. You can also find the re-balance calendar for 2016 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Adding Value To Your Own Investments

Most of our readers and users are self directed investors or at least keep a keen eye on their investments. When you are on your own, one of the most important factors for success is a good discipline (or behavior). In this newsletter, we will discuss some relevant issues. Before doing that, we would like to address a few usage/support issues. 

Support Issues

Email issue: we recently moved our servers to Amazon cloud. We believe it’s a good move that will enable us to scale easily and serve more reliably and securely. However, because of the move, some users have told us that they have not been able to receive any email from us (i.e. from Specifically, we have found that Verizon emails (i.e.  emails at have been blocked. We are working with Verizon to resolve this. We would like to ask anyone with a Verizon email to send a request to Verizon to ask them to unblock mails from That will help to address this issue more effectively. We would also like to ask anyone else to send us an email to let us know if you have had trouble to receive newsletters, transaction or performance emails from us. So far, we only know the Verizon problem though. 

As always, we promise not to spam your emails. We also reminder anyone who would like to discontinue receiving emails from us to look at the bottom of our emails: it should have a link for you to opt out future emails from us. You just need to click on the link to tell us. 

Commodity fund QRAAX (Oppenheimer Commodity Strat Total Ret A) closed: this fund has been used in several model portfolios solely because it has one of the longest history among broad base commodity mutual funds. It is used, for example, in  P Goldman Sachs Global Tactical Include Emerging Market Diversified Bonds as a candidate fund. As a result, we have replaced this fund with PCRDX (PIMCO Commodity Real Ret Strat D), another broad base commodity fund that has a long history. It’s actually very discouraging to see that this fund has had a very dismal performance for the past 10 years (see Bloomberg article for more discussion). Other commodity funds have fared better but still have a horrible performance, a stern reminder that investing in commodity or any risk asset related (such as stocks) can result in large loss if you just buy and forget:

Portfolio Performance Comparison (as of 7/15/2016): 
Ticker/Portfolio Name YTD
1Yr AR 3Yr AR 5Yr AR 10Yr AR 10Yr Sharpe
QRAAX (Oppenheimer Commodity Strat Total Ret A) 9.2% -14.4% -15.3% -12.9% -11.5% -0.52
PCRDX (PIMCO Commodity Real Ret Strat D) 9.8% -9.4% -13.3% -12.6% -4.7% -0.27
DBC (PowerShares DB Commodity Tracking ETF) 6.9% -10.8% -17.9% -14.0% -5.1% -0.27

Because of the change, when you customize a new portfolio, the back testing result will be different from that of P Goldman Sachs Global Tactical Include Emerging Market Diversified Bonds, which had been using QRAAX until recently (i.e. 7/28/2016). It’s been our policy and intention to keep the history of our model portfolios as much intact as possible. 

If you have a customized portfolio from the above portfolio, you should try to change its fund ‘Funds’ parameter using PCRDX instead. Otherwise, your portfolio might stop updating before 7/29/2016. If you have question, please let us know so that we can help you out. 

As another reminder, we would like to emphasize again that it’s always a good idea to logon to your MyPlanIQ account at a rebalance time (such as month end or on the day specified in our re-balance calendar) to check your portfolio(s). Because of issues like the above, it’s not a 100% sure thing the email notification can always work. If you miss your newsletters, you can always logon your account and visit Newsletter link in our navigation bar. 

Adding Value to Your Own Investments

For many investors whose investments are managed by financial advisors, it’s always a hot topic to quantify the value of their financial advisors. For self directed investors like most of our users, you are your own advisor. Thus, understanding this topic can help you to focus on providing these ‘values’ to yourself instead. A 2014 study by Vanguard, The Added Value of Financial Advisorslooked at data over a 15-year period. In the study, it classifies into the following 3 areas that a financial advisor can add extra returns (values) to his clients.

Let’s look at these areas through a self directed investor’s angle: 

1. Behavioral coaching: 1.50% (or more)

This is the area a financial advisor can provide most value. The key issue is that investors can be easily and emotionally swayed when their investments are not doing well: it could be they are losing money or they are just not doing as well as general market indexes or even as simple as that their returns are not as good as some ‘hot’ investments. Most people will have a doubt on their investments when these situations arise. Without a financial advisor (or an authority figure) holding hands, investors can easily abandon their plans and go for other routes. Examples:  liquidate at the bottom of a bear market and become very timid to go back to stock markets later on; change strategies since they are not ‘working’ — currently, for example, Tactical Asset Allocation(TAA) has not done well, so now I’m going back to strategic buy and hold, only to find out later on, such a strategy can produce a large than expected loss and then switch again; my neighbors made tons of money in high tech internet stocks, they are the future and I will buy these fantastic good companies at the current prices and hold them for a long time, only to find out they lose half of their values or more later on and then bail out at that time, never mind holding them for a long time. 

If an investor has a doubt, her/his advisor can coach and hold a firm position to stick to the original plan to navigate through such a period. 

MyPlanIQ intends to provide regular educational newsletters and articles to ‘coach’ or reaffirm our users’ behavior. As a self directed investor, you are also encouraged to seek advice and discussion with other users/investors in our community. We believe it’s possible to create an ecosystem to help each out. That’s the value you can add in the behavior area. 

2. Portfolio construction: 1.25%

Advisors can also add good value to help clients to construct a diversified asset allocation portfolio that suits their risk profile. It’s our core belief that asset allocation plays the predominant role in portfolio construction. Fortunately, MyPlanIQ provides a robo advisor type online questionnaire and helps to construct an asset allocation portfolio using low cost index ETFs, mutual funds or diversified active managed mutual funds. 

Nevertheless, we acknowledge that for many investors who have various investments: multiple tax deferred 401ks and IRAs (for husband and wife), (multiple) taxable brokerage accounts, annuity accounts etc., things get more complicated. We encourage investors with complicated investments to find a financial planner or adviser to help to construct portfolios (mostly one time fee charge) or just bring up the topics in various online forums to help each other.  

3. Portfolio management: 1.05%

 Portfolio management involves periodical rebalances. This is the least challenging part, in our opinion. Most MyPlanIQ portfolios will only rebalance once a month, often once a quarter or so, based on our ‘mechanically’ generated rebalance instructions, . However, the issue here is more related to the first area: behavior or discipline. Because of the doubt or emotional hunch, investors/users might opt not to follow or even alter their portfolio construction on the fly. This would completely destroy the whole essence of an investment process. 


In our opinion, the hardest or the biggest challenge is in the first area: behavior coaching/control. It has the most gain if self-directed investors can focus on it and improve their behavior or become more disciplined. The other two areas are more logistical implementation that does not really demand much work. 

Market Overview

Q2 earnings reported so far continue to point to the fifth consecutive quarter of year over year earnings decline: as of last Friday, Factset‘s blended (actual + expected) earnings is -3.8% year over year, after 63% of S&P 500 companies reported earnings. Currently, with stocks and bonds being at elevated valuation level, just as what we pointed out in July 11, 2016: Asset Trend Review, we see practically all major assets will deliver low returns in the coming decade. Substantial market corrections are unavoidable. We just don’t know when. It is thus important to rebalance your portfolios to a risk level exposure you are comfortable with. Furthermore, sticking to a well researched investment plan with a realistic expectation is the only way to get us through this period. This would mean that for a strategic allocation portfolio, we should fully expect some big loss down the road. For a tactical portfolio, we should expect at some point in the future, it will reduce stock and other risk asset exposure to avoid large loss. 

For more detailed asset trend scores, please refer to 360° Market Overview

We would like to remind our readers that since the financial crisis in 2008-2009, we have not seen substantial structural change in the U.S., European and emerging market economies. Economies have heavily relied on low interest debts. Capital might be misallocated to unproductive investments and consumption. U.S. stock valuation is at a historically high level. It is thus not a good time to take excessive risk. However, we remain optimistic on U.S. economy in the long term and believe much better investment opportunities will arise in the future. 

We again would like to stress for any new investor and new money, the best way to step into this kind of markets is through dollar cost average (DCA), i.e. invest and/or follow a model portfolio in several phases (such as 2 or 3 months) instead of the whole sum at one shot. 

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