Bearishness, begone!

The returns of my Trend Asset Allocation Model have been strong. Based on an "out of sample" record of signals from 2013 and a simulated portfolio that varies up to +/- 20% from a 60/40 benchmark, the model portfolio has managed to achieve equity-like returns with 60/40-like risk. Performance has also been consistently positive in the shorter time frames (to July 26, 2022).

• 1 year: Model portfolio -8.1% vs. 60/40 -9.8%
• 2 years: Model portfolio 7.1% vs. 60/40 4.2%
• 3 years: Model portfolio 10.2% vs. 60/40 7.1%
• 5 years: Model portfolio 10.9% vs. 60/40 7.8%

   

The Trend Model turned neutral from bullish in January 2022 and turned bearish in March. Amidst all the gloom about a global recession, it's time to become more constructive on equities. The signal has been upgraded to neutral from bearish.

Here's why.

The full post can be found here.