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

Regular AAC (Asset Allocation Composite) portfolios are always rebalanced on the first trading day of a month. 

For regular SAA and TAA portfolios, the next re-balance will be on Monday, December 23, 2019. You can also find the re-balance calendar for 2019 on ‘Dashboard‘ page once you log in. Please note that we are phasing out this rebalance calendar. 

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.

Portfolio Constructions For Advanced Users

Recently, as one of the major efforts to improve our ease of use and performance, we have made some major changes in our offerings. Specifically, we introduced AAC (Asset Allocation Composite) strategy and simplified our portfolio suggestions to basic users. Interested readers can refer to the following newsletters for details: 

In this newsletter, we will try to clarify our services and then discuss how to utilize our suggested portfolios for advanced (expert and pro) subscribers. 


We have received several email questions on the recent changes. Specifically, users are concerned about what happens to SAA and TAA. The following are our intentions: 

  • For registered non-subscribers, we still offer Strategic Asset Allocation – Equal Weight for 401k and other pre-defined plans. 
  • For basic subscribers, we now only offer AAC(Asset Allocation Composite) based portfolios for both brokerage investment accounts and 401k and other pre-defined plans. The main reasons are 
    • 1). Ease of use: AAC based portfolios require less drastic rebalance activities. 
    • 2). Easy to comprehend (or more main stream): AAC portfolios are more in line with SAA Optimal (Strategic Asset Allocation – Optimal) portfolios: their major asset allocations seldom change and we will only alter the allocations only when a long term (10 years or longer) secular trend changes significantly. 
    • 3). Avoid big loss: AAC portfolios have embedded risk reduction mechanism that can reduce risk asset (stocks) allocations when a distressed market condition occurs.
    • 4). Better returns: AAC portfolios have similar or better performance (returns) than both SAA Optimal and TAA (Tactical Asset Allocation) based portfolios. The above reasons make AAC more suitable for average investors or those who are not very active in investing (most basic subscribers fall into this category). Furthermore, by reducing the types of portfolios to only AAC, investors will be much less confused. 
  • For advanced (expert and pro) subscribers, in addition to AAC, we still offer SAA Optimal and TAA portfolios. These portfolios, we believe, still have long term values. Two major secular trends have existed in the current market cycle since 2009: the US stock market strength (see below for more details) and the ultra low interest rates. As a result, the more global oriented SAA and TAA portfolios have had worse returns compared with a more US centric portfolio. Furthermore, the relative momentum between stocks and bonds used in TAA also has had a negative effect on TAA performance. However, when these major secular trends change in the future, it’s likely that these portfolios will outperform again. Of course, at the moment, we have no visibility on when these secular trends will change (in fact, we believe they will still last for a while). But in a very long term, there is no reason why the tides will not change. 

In addition, for advanced subscribers, we now clearly list some portfolios under ‘Practical Advanced Portfolios’ on Advanced Strategies page. These are the portfolios we advocate for these investors. We believe they have some practical immediate applications. We also now put all other portfolios listed on the old page under ‘Interesting Advanced Portfolios’ section. These portfolios are more for reference/benchmarking purposes. Of course, some skilled investors might be able to utilize these portfolios or construct their own based on similar but improved strategies. 

In the following, we will have more detailed discussions on how to utilize the practical portfolios. For basic and other general readers, feel free to skip the following section. 

Global Asset Allocation Portfolios  

In addition to a normal AAC portfolio such as Stock ETFs And Bond Mutual Funds Moderate Schwab (or MPIQ Core Asset Mutual Funds Asset Allocation Composite Moderate for longer benchmark purpose or just use mutual funds, see November 25, 2019: Core ETFs or Core Mutual Funds Portfolios), an advanced subscriber can construct a global portfolio by allocating proper percents of capital into the following two portion:  

For example, the following 60/40 (60% stocks/40% bonds) moderate portfolio Advanced Global Asset Allocation Moderate consists of the following:

Buy and Hold (Annually Rebalance)
Stocks P_73834 (P Composite Momentum Scoring Global Risk Assets)  60%
Bonds P_73808 (Schwab Total Return Bond Plus) 40%

It has some of the best returns with low risk: 

Portfolio Performance Comparison (as of 12/6/2019):
Ticker/Portfolio Name YTD
1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR Since 1/1/2001
Advanced Global Asset Allocation Moderate 20.6% 14.8% 12.1% 7.9% 10.2% 11.3% 12.5%
MPIQ Core Asset Mutual Funds Asset Allocation Composite Moderate 17.9% 13.4% 9.4% 7.0% 9.5% 10.1% 11.5%
VBINX (Vanguard Balanced Index Inv) 19.7% 15.2% 10.0% 7.6% 9.4% 7.2% 6.5%
DGSIX (DFA Global Allocation 60/40 I) 15.1% 11.1% 7.3% 5.5% 7.2% 6.0% 6.1%

Detailed year to year comparison >>

The above didn’t list its maximum drawdown. Interested readers can click on the detailed link in the above to compare. 

This portfolio has had more than 1% extra returns over the basic AAC portfolio. It actually also outperformed even the ‘best’, hard to beat PRWCX (T. Rowe Price Capital Appreciation) by even bigger margin for the past 15 years. 

Further comments: 

  • P Composite Momentum Scoring Global Risk Assets candidate funds are Vanguard index funds VFINX, VGTSX, VEIEX, VGSIX and VFITX. You can really use corresponding Vanguard ETFs to implement this portfolio. The reason to use mutual funds, as many portfolios listed on our site, is really to get a longer historical data. 
  • Similarly, you can opt to MPIQ Core ETFs Fixed Income instead of a mutual fund based portfolio. We have discussed this topic extensively in our newsletters. 

US Allocation Portfolios

More adventurous investors can also look at ‘Advanced US Stock Portfolios’ on Advanced Strategies

Ticker/Portfolio Name YTD
1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR
P Composite Momentum Market VFINX 27.8% 18.9% 14.6% 10.3% 13.0% 11.8%
P Composite Momentum Scoring Factor ETFs 25.3% 18.1% 18.6% 14.3% 14.7%  
P Composite Momentum Scoring Style ETFs 28.7% 19.6% 11.6% 9.5% 13.6% 12.1%
P Composite Momentum Scoring Fidelity Select Funds 9.2% 0.2% 7.7% 9.6% 12.9% 16.1%
SPY (SPDR S&P 500 ETF) 27.2% 18.5% 14.6% 10.8% 13.2% 8.8%

Specifically, we make the following comments:

  • An US stock portfolio can be used as a standalone portfolio so long you have its allocation accounted for in your overall investment accounts. Or you can construct an US centric balanced portfolio using US stock portfolio + a bond portfolio (such as our total return bond ETF or mutual fund portfolio). 
  • Factor ETFs have become more mature and practical, so P Composite Momentum Scoring Factor ETFs is a good portfolio for a supplemental sub-portfolio to represent US stocks. 
  • P Composite Momentum Scoring Style ETFs shows that even style ETFs with composite momentum can beat US index such as SPY in a long time period (such as 10, 15 years or longer). One can utilize this portfolio to represent US stocks, just like the Factor portfolio. 
  • P Composite Momentum Scoring Fidelity Select Funds has a very good long term returns but its maximum drawdown and uneven returns (look at its recent returns) makes it to be only useful for a very supplemental sub-portfolio. We see two ways to utilize this portfolio: 1). allocate a small percentage of capital to such a portfolio to enhance your long term overall returns. 2). For some investors who can access to a 401k or annuity plan that offers Fidelity Selected Funds, you can again follow this portfolio (or construct your own) for some small percent capital.  

Market overview

Not much has changed in the final month of 2019: stocks are hanging in record territories. Investors are now waiting for US-China trade deal resolution and UK’s Brexit related election. As we have stated numerous times, the high valuation of stocks and bonds, the extremely over extended markets and the uneven markets (markets are primarily driven by a few of large cap stocks) should cause investors’ concern. One should be prepared for a possible change of trends while staying the course. 

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

In terms of investments, even after the recent retreat, U.S. stock valuation is still at a historically high level and a bigger correction is still waiting to happen. It is thus not a good time to take excessive risk. However, we remain optimistic about 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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