Moderate Risk new allocations for September… TLT

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    So I see we are now boarding the TLT train heavily. I watched TLT’s performance all last month as I have a good portion of a similar allocation in another portfolio. The whole time I thought to myself we should have been in TLT and not TIPS. After a 12% run in one month, last month, I guess I question whether now loading up on TLT is a sound strategy. Seems like the wrong time to be buying in. I guess I’m just asking for moral support in following the strategy when it seems to have missed. Any other stories like this where a strategy told you to invest in something that just had an incredible run up last month and it still worked out good the following month?


    Take a look at the top3 strategy:
    It a bit more adaptive and has a shorter lookback period.


    Okay, but the Top 3 is also using TLT this month.
    Anyway, I think the key point is that any momentum based strategy has the risk of chasing profits. In the long run it should work out.
    Good luck


    Yes, that’s indeed the main point. I agree both TLT but also Gold had an incredible run, and we’re at historical low rates, and a very strong Dollar.

    That’s the psychologically tough part of Momentum driven strategies: Buy when things have already moved quite a bit, sell even if you think the party might re-start.

    However, we’re late in the cycle, and despite the ‘bit’ of volatility recently we’ve not seen any serious correction yet, were the flight to safety moves such safe-haven prices much more violently.

    Just some days ago replied to a comment re how negative yields feel like in Europe, so who says they 1.5% in the US is the bottom? See the comment by Vangelis today what it would take to devaluate the USD rate-wise.

    If you feel uncomfortable with long term bonds or gold, the signal basically says ‘risk-off’. Cash is an alternative, even if historically in our models you’d lost some of the performance.

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