July moderate allocation

Nothing changed in June. Markets appear risky.

Positive factors:
None

Neutral factors:

Long term trend (within 8% of 200 day)

Market valuations

Sentiment

Negative factors:
Underlying technical strength

'Ahead of curve' investor positioning

Allocation for July:
Stocks: 15%
Bonds: 85%

July aggressive allocation

Nothing changed in June. Underlying technical strength is negative and sentiment/valuations are neutral.

Positive factors:
None

Neutral factors:

Long term trend

Market valuations

Sentiment

Negative factors:
Underlying technical strength

'Ahead of curve' investor positioning

Allocation for July:
Stocks: 25%
Bonds: 75%

June aggressive allocation

To my surprise, many indicators are stuck in the middle and smart money is staying away from being allocated to stocks aggressively. This is the lowest stock allocation reading so far. High VIX seems to be throwing a lot of smart money investors to the sidelines. Many intermediate term breadth indicators have deteriorated in the month of May.

Positive factors:
None

Neutral factors:

Long term trend

Market valuations

Sentiment

Negative factors:
Underlying technical strength

'Ahead of curve' investor positioning

Allocation for June:
Stocks: 25%
Bonds: 75%

June moderate allocation

To my surprise, many indicators are stuck in the middle and smart money is staying away from being allocated to stocks aggressively. This is the lowest stock allocation reading so far. High VIX seems to be throwing a lot of smart money investors to the sidelines. Many intermediate term breadth indicators have deteriorated in the month of May.

Positive factors:
None

Neutral factors:

Long term trend (within stone throwing distance of 200 day)

Market valuations

Sentiment

Negative factors:
Underlying technical strength

'Ahead of curve' investor positioning

Allocation for June:
Stocks: 15%
Bonds: 85%

May aggressive allocation

Positive factors:
Long term trend

Neutral factors:

Underlying technical strength

Negative factors:
Market valuations
Sentiment
'Ahead of curve' investor positioning

Allocation for May:
Stocks: 35%
Bonds: 65%

May moderate allocation

Positive factors:
Long term trend

Neutral factors:

Underlying technical strength

Negative factors:
Market valuations
Sentiment
'Ahead of curve' investor positioning

Allocation for May:
Stocks: 20%
Bonds: 80%

April aggressive allocation

Aggressive allocation looks at underlying technical strength, sentiment, long term trend, stock market valuations and how 'ahead of the curve' investors are positioned to calculate portfolio allocation.

It gives more weight to technicals and when things are lined up well, the stock allocation can hit 100%

I will list positive and negative contributors to aggressive allocation for the month of April.

Positive factors:
Underlying technical strength
Long term trend

Negative factors:
Market valuations
Sentiment
'Ahead of curve' investor positioning

Allocation for April:
Stocks: 55%
Bonds: 45%

For reference, moderate stock allocation for April is only 35%.

April moderate allocation

Moderate allocation looks at stock market valuations, underlying technical strength, sentiment, long term trend and how 'ahead of the curve' investors are positioned to calculate portfolio allocation.

I will list positive and negative contributors to stock allocation for the month of April.

Positive factors:
Underlying technical strength
Long term trend

Negative factors:
Market valuations
Sentiment
'Ahead of curve' investor positioning

Allocation for April:
Stocks: 35%
Bonds: 65%

In coming months, the stock and bond allocation will be assigned to various sectors and classes of the market subject to well defined criteria.

Keep it simple asset allocation

We have money that needs to be invested and there are many ways it can get allocated. It is proven that the best investment returns happen with correct asset allocation.

Let us get started with simple asset allocator.

Stocks beat returns of all other asset classes but only over long periods of time. Some times, it is longer than our horizons allow (like 2 decades, 3 decades).

Stocks give the best returns when purchased at low valuations. Stocks give the best returns when we don't follow the herd.

Our age determines how much we can allocate to bonds. This is done to ensure we cut exposure to risk as time is not on our side.

My effort on this blog is to show monthly stock allocation for moderate and aggressive investor. I would also use this technique for my investments, so I can see how this works for the next decade. If things go well, may be this allows a lot of small investors to benefit in coming decades. If it doesn't, we can conclude that simple or complex, this is a game that chooses winners and losers randomly.