So how much did my trend-following strategy make during the past financial year?
At the end of the day, it all comes down to numbers. Is a strategy worth following, or not? Of course, everything is relative…..
As it is the end of the financial year for many people, now is quite a good time to have a look back and see how my trend-following strategy has done over the past twelve months. Remember, this is an asset allocation system, that uses timing. So I split my investment pot into five different slices: shares, property, gold, commodities and bonds. This split helps to give some protection against market collapses. I then decide whether to be in or out of that particular class by looking at a weekly graph. Here is an example of the commodity investment trust that I track. It is a graph of the weekly close price (black line) with the average price for the past year (green line).
The idea is that I will be invested in an asset class when it is rising, and will be out of it when it is falling.
My account, using this strategy, rose by 16.3% over the past year. Whether this was good, or bad, depends upon what one compares it to. A useful comparison for me would be the performance of the Personal Assets Investment Trust. This is a FTSE 350 company that invests in blue-chip commodities in the UK and US (43.2%), some commodity shares in Canada (3.7%), gold (10.5%), bonds (23.6%) and cash (19.1%). The Personal Assets Trust (PAT) made a gain of 11.9%over the past twelve months, according to trustnet.com. It can be seen that PAT has a much lower commodity weighting than my portfolio, to which I attribute the performance of my portfolio
I would have done better with all of my investments in shares over the past twelve months , using an investment trust, such as Scottish Mortgage (up 40.9%) or the Vanguard All-World ETF (up 33.3%), but this would make me more exposed to a crash in share-prices. As mentioned earlier, using different asset classes is a form of hedging, an insurance policy, if you like. This can either be very good (if there is a crash), or very costly (if there isn’t a crash).
Anyway, here is a video with my views of the different asset classes as they stand this week, ending 31 March 2017. Next week I will discuss another portfolio that I run, an asset allocation portfolio, without timing. Will it have done better, or worse than my timing portfolio? You will have to read next weeks blog-post to find out!
[embedyt] https://www.youtube.com/watch?v=JQ3N1XHIp_c[/embedyt]
As it is the end of the financial year for many people, now is quite a good time to have a look back and see how my trend-following strategy has done over the past twelve months. Remember, this is an asset allocation system, that uses timing. So I split my investment pot into five different slices: shares, property, gold, commodities and bonds. This split helps to give some protection against market collapses. I then decide whether to be in or out of that particular class by looking at a weekly graph. Here is an example of the commodity investment trust that I track. It is a graph of the weekly close price (black line) with the average price for the past year (green line).
The idea is that I will be invested in an asset class when it is rising, and will be out of it when it is falling.
My account, using this strategy, rose by 16.3% over the past year. Whether this was good, or bad, depends upon what one compares it to. A useful comparison for me would be the performance of the Personal Assets Investment Trust. This is a FTSE 350 company that invests in blue-chip commodities in the UK and US (43.2%), some commodity shares in Canada (3.7%), gold (10.5%), bonds (23.6%) and cash (19.1%). The Personal Assets Trust (PAT) made a gain of 11.9%over the past twelve months, according to trustnet.com. It can be seen that PAT has a much lower commodity weighting than my portfolio, to which I attribute the performance of my portfolio
I would have done better with all of my investments in shares over the past twelve months , using an investment trust, such as Scottish Mortgage (up 40.9%) or the Vanguard All-World ETF (up 33.3%), but this would make me more exposed to a crash in share-prices. As mentioned earlier, using different asset classes is a form of hedging, an insurance policy, if you like. This can either be very good (if there is a crash), or very costly (if there isn’t a crash).
Anyway, here is a video with my views of the different asset classes as they stand this week, ending 31 March 2017. Next week I will discuss another portfolio that I run, an asset allocation portfolio, without timing. Will it have done better, or worse than my timing portfolio? You will have to read next weeks blog-post to find out!
[embedyt] https://www.youtube.com/watch?v=JQ3N1XHIp_c[/embedyt]
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