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

Regular AAC (Asset Allocation Composite), SAA and TAA portfolios are always rebalanced on the first trading day of a month. the next re-balance will be on Tuesday September 1, 2020.

Please note: As of March 1, 2020, we officially phased out our old rebalance calendar for both SAA and TAA. They are now always rebalanced on the first trading day of a month. 

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.

Newsletter Collection Update

Latest update on 8/17/2020

Highlighted are the recent articles. 

The most recent significant updates are a series of articles on our new Asset Allocation Composite strategy based portfolios. As we are making efforts to improve the quality of our portfolios and ease of use, we ask readers to pay special attention to these articles. 

We have published numerous newsletters over the years and many readers have asked us to categorize and summarize our previous newsletters as they tend to cover various topics. We believe this is a good idea as many of them provide useful information that can be useful for both new and old users. We highly encourage users to read these newsletters as understanding many issues and our methodology is an inherent part of using our service. In the following, we select and list some newsletters in each category.

Portfolio Management

Asset Allocation and Other Investment Strategies

Asset Allocation Composite:

Strategic: 

Tactical

Asset Behavior

Strategic and Timing

Fund Selection

Core Satellite and Multiple Strategies

Momentum Strategies and their behavior. How various asset allocation strategies work in different market cycles

Strategy and Portfolio Evaluation

Risk Parity, Four Pillar and Permanent Portfolios

More newsletters can be found in these articles:

Portfolio Rebalance & Daily Management

Risk Management & Investor Behavior

Portfolio risk management techniques and issues. 

Investment Philosophy

Fixed Income, Dividend, Total Return Bond Funds & Conservative Allocation

The following newsletters address many concerns for retiree, conservative and income investors. 

Fund Review

Factor ETFs

General mutual funds and ETFs

Financial Planning & Retirement

Cash Management

Features & System Q&As

These newsletters address new features and how to for our system usage. 

Existing Portfolio Performance Reviews

In general, we review various portfolio performance in each newsletter. However, you can get latest up to date  performance result and comparison by clicking on links below portfolio comparison tables listed in our quarterly or annual review newsletters: 

Portfolios suggested by advisors and brokerages

Market overview

Factset showed the following earnings per share (EPS) forecast and price chart for S&P 500 companies: 

Interestingly, the CY 2020 EPS dropped as much as the S&P 500 price, except the price reached the bottom much earlier than the EPS. On the other hand, the index price has recovered all the way back to its previous high (record high) while the EPS just shows some upward improvement. One can certainly marvel at how ‘impatient’ or ‘enthusiastic’ the index price has been, compared with the underlying earnings power. 

There have been some more market internal improvements lately: small/mid cap stocks have surpassed their 200 day moving averages, though still below their February record highs. Utilities stocks, however,  are still not in a solid uptrend. Furthermore, Yardeni shows the following price chart for S&P 500’s top six stocks: Facebook, Amazon, Apple, Netflix, Google, Microsoft and the rest of 494 stocks as of 8/14/2020: 

So excluding these ‘magnificent’ 6 stocks (whose prices have been up collectively 40% this year), the rest stocks collectively are still losing money this year. 

It’s likely that stocks will possess even more uniform upward momentum in the coming weeks. However, subjectively, it’s hard to see how much further stocks can go up given the extremely high valuation and the messy coronavirus pandemic situation right now. Regardlessly, we shall stick to our strategies and do the following  

  • For strategic allocation (buy and hold) investors, ignore the current market behavior. Remember, as what we have emphasized numerous times, when you choose and commit to a strategic portfolio, you essentially know and commit that your investment horizon (or the time you need to utilize this capital) is 20 years or longer. As we pointed out, if your investments are those diversified (index) funds such as an S&P 500 index fund (VFINX, for example), you know your money is in some solid ‘business’ that eventually (20 years later) will deliver some reasonable returns. As long as you are comfortable with this thesis, you should sit tight and forget about the current gyration.
  • For tactical investors, again, you have to ignore the current market noise. Furthermore, you should follow your strategy rigorously, especially in a time like this. Human emotion, both optimistic and pessimistic, and human desire, both greedy and fearful, are your worst enemies. This has been shown to be true time and time again.

In terms of investments, stocks are somewhat cheaper. Investors should not be swayed by the current market volatility and economic distress, instead, they should stand ready to take advantage of the opportunities. For most Americans, we offer the following Winston Churchill’s remark made in the darkest days of World War II: “The Americans will always do the right thing, but only after they have tried everything else.” As a country, the US (and the rest of the world) will get over this, as always, even after stumbles. The past development has been very supportive to our optimistic long term view so far. 

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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Any investment in securities including mutual funds, ETFs, closed end funds, stocks and any other securities could lose money over any period of time. All investments involve risk. Losses may exceed the principal invested. Past performance is not an indicator of future performance. There is no guarantee for future results in your investment and any other actions based on the information provided on the website including, but not limited to, strategies, portfolios, articles, performance data and results of any tools. All rights are reserved and enforced. By accessing the website, you agree not to copy and redistribute the information provided herein without the explicit consent from MyPlanIQ.