Every month, rebalance the portfolio to 30% US equities (VTI), 40% long-term US Treasuries (TLT), 15% intermediate-term US Treasuries (IEI), 8% commodities (GSG) and 7% gold (GLD).
Performance and strategy calculations use adjusted close, including split and dividend adjustments. Quantities are adjusted simulation units.
Why does it work?
This strategy uses asset class diversification based on different economic regimes and seasonality to reduce volatility and drawdowns. During recessionary regimes when asset classes such as gold and bonds significantly outperform stocks, the strategy will cash out on the outperformance from gold and bonds and reinvest the profits into stocks. This allows the strategy to take advantage of the lower stock prices during a crisis. Similarly, during a bull market where risky assets such as stocks outperform assets such as gold and bonds, the strategy will cash out some of the profits from stocks and reinvest them into gold and bonds at lower prices.
What is the performance?
The Performance and Statistics tabs show the current verified adjusted-price simulation in USD, with SPY as the S&P 500 ETF benchmark. Annualized returns, volatility, Sharpe ratio and maximum drawdown are calculated from the same published result. Use the chart dates to identify the period being compared. The Positions tab samples historical simulated allocations; its last displayed date can differ from the final performance date.
