The Core portfolio spent January (0.0%) entirely in cash, then shifted into high quality bonds and short term Treasuries for February (+0.50%) and March (+0.51%). The Core portfolio took on some equity exposure for April (+.75%), and continues with the same mix of equity and fixed income for May.
My first objective is to minimize the potential for large drawdowns. TAAS Core has been doing that well, both historically and during the past year. On a monthly close basis, we have had two recent declines in the SPX, the first at 8.9% and the second at 7.1%. The decline in the TAAS Core was just 2.17%.
My second objective is to capitalize on opportunities to participate in positive market trends. While TAAS Core has done very well historically, it has lagged VBINX and SPY in capturing gains during the past year. That said, I note that the market is below where it was in May of 2015 so there has been no positive market trend.
Given current market conditions, I am very comfortable choosing lower risk and volatility over returns. I have also reached the point where I pretty much ignore the TAA portfolio between rebalancing.
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