This site will already celebrate its 15th anniversary next year. To mark the occasion, I have been working for quite some time on changes to be made, not only to the editorial content, but also to the determining portfolio.
In terms of articles, it is true that I have paradoxically slowed down the pace since I left salaried employment. There are several reasons for this. First, it is more difficult for me to talk about subjects that I am no longer directly confronted with, such as Rat Race. That's a pretty good sign. I also admit that I've had a bit of a good time and have been a little less available to write.
However, I am getting motivated again and I am thinking of introducing a new series of articles devoted to backtests soon. The idea is to see how certain fundamental and technical factors can influence stock prices, particularly in Switzerland, but also in France, for my readers in France. It is also possible that stock analyses will be added to this, as I have already done in the past.
At the portfolio level, many changes are also planned. The goal is to build on the key concepts discussed in my book, trying to enhance them with new approaches, which I have been testing for a few months. Here are some new features planned:
- Compléter les stratégies existantes (Micro Caps, Blue Chips, TAA et Trading Auto Signal) par une ou deux nouvelles stratégies, vraisemblablement une de type "Value" et une autre de type "Growth", afin de bénéficier de leurs synergies (elles fonctionnent souvent en alternance).
- Underweight the current Blue Chips strategy, which is currently clearly in the majority, in order to make some room for new ones and reduce the risk inherent in over-representation. To do this, focus, among the current Blue Chips, on those with the best short/medium term potential to possibly return later to the others and so on.
- Substantially increase the frequency of rebalancing/revaluations of equity strategies. Micro Caps would thus go from a period of 6 to 1 month and Blue Chips from 12 to 3 months. The future strategies mentioned above should be, like Micro Caps, at a monthly rebalancing frequency. The advantage of this approach is that it allows you to react early enough to any micro or macroeconomic change, whether positive or negative. Thanks to this, we can do without the manual monthly trailing stop loss method 15%, which did a bit the same, but only for negative events of a technical nature (price drop). Shortening the duration of rebalancing certainly implies a higher turnover (more transactions). However, the additional gains generated easily cover the additional costs (as long as you don't stay with an old-school financial intermediary). The investor who prefers a lower turnover can stick to the Blue Chips strategies (few transactions, despite a shortening to 3 months) and TAA (unlike the others, its rebalancing frequency is increased to 2 months, see next paragraph).
- Plus j'avance avec la stratégie TAA, plus je réalise qu'elle bénéficie de la simplicité. On se souvient que cette stratégie comptait au début une multitude d'actifs. Aujourd'hui, elle ne comporte plus que de l'or, des obligations à long terme et des cryptos. Dans un futur très proche, je pense même me passer totalement du Bitcoin et de l'Ethereum. Cela peut paraître étonnant, car je demeure plus que convaincu de leur potentiel sur le long terme (j'en achète même pour moi en dollar cost averaging, hors portefeuille déterminant, en stockage à froid). Toutefois, le but du portefeuille déterminant a toujours été de maximiser les gains tout en minimisant les risques (ce qui permet d'augmenter le taux de retrait). On peut obtenir un meilleur ratio rentabilité/risque en investissant dans des actions, sans cryptos. Même si ces dernières affichent une corrélation faible avec les actions, leur ajout au PF ne parvient malheureusement pas à améliorer son ratio de Sharpe. De plus, en se focalisant sur l'or et les obligations, qui sont tous deux nettement moins volatils que les cryptos, on peut se permettrede diminuer la fréquence des rééquilibrages, passant, comme évoqué ci-dessus, de 1 à 2 mois.
Here are my thoughts, a bit random. If you have any questions or suggestions, feel free to submit them to me below, or directly in PM. I think that most of you should not be too disturbed by these changes. If so, let me know.
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Hi Jerome,
Very good news I would say. 🙂
I particularly enjoyed the stock analysis (and articles in the same vein). It allows you to practice and "stay up to date" and train/check your understanding of finance.
I won't miss cryptos, especially bitcoin. ;-).
And more frequent rebalancing seems like a good thing to me. At the price of transactions on IBKR, it's a little personal touch that I was already doing on the PF (according to my judgment vs the observed deviation).
Hi Thierry,
happy to read that my projects are going in the same direction as your own journey.
Indeed, given the price of transactions on IB, the frequency of rebalancing has very little weight on overall performance.
It would be cool if you told us about artificial intelligence! It's the future. Whether we like it or not. Besides, even though I know that it currently requires 10% of the planet's energy resources, not to mention the hundreds of billions of liters of water used to cool servers, I still use it every day at work and I couldn't do without it anymore. Why would I deprive myself of it? And this technology will arrive very soon in the world like electricity arrived 150 years ago. Honestly, it scares me!
It's funny that you mention it to me because I have thoughts on this subject. It is also one of the points that led me to want to establish a "growth" strategy as mentioned in the article. I still have other tests that I am conducting in this area, but for the moment it is too fresh for me to tell you about it. My portfolio already currently includes a few companies active in this area.