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, May 22, 2017. You can also find the re-balance calendar for 2017 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.

The Long Term Stock Market Timing Return Since 1871

Last week, we wrote about S&P 500 rolling 10 to 20 years returns for over 100 years (see April 17, 2017: Risk vs. Volatility: Long Term Stock Market Returns). It’s natural to ask how active investment strategies can improve returns and/or reduce risk (or overall volatility). As many have known, we have advocated strategies that are based on long term stock market valuation metrics (see  March 13, 2017: Long Term Stock Valuation Review, for example) or long term stock timing such as S&P 500 total return 200 days (10 month) moving average  (see February 20, 2017: Long Term Stock Timing Based Portfolios And Their Roles). In this newsletter, we will look at how the 10-month (or 200 days) moving average based portfolio on S&P 500 has performed for this long period of time. 

The moving average portfolio is very simple: at each month end, look at the S&P 500 total return (i.e. not just index price, but with dividend reinvested) and its 10 month moving average. If the total return is above the moving average, it invests in S&P 500, otherwise, it just invests in cash. In this study, we further assume cash does not generate any extra return, an assumption we will discuss later. 

The Data

Using the same Shiller’s monthly S&P 500 index data which spans from 1871 to the end of 2016, we construct a 10-month moving average of S&P 500 total return (dividend reinvested) based portfolio, what we find is the following: 

Please login or register an account to view the newsletter