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Adaptive Asset Allocation Strategies for Core Investments

Adaptive Asset Allocation Strategies for Core Investments. Gabe Varga, CMT Website: www.FidelitySignal.com E-mail: axiomix.inc@gmail.com INDIANAPOLIS METRO AREA - TRADERS & INVESTORS May 4, 2013. Adaptive Asset Allocation Strategies for Core Investments.

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Adaptive Asset Allocation Strategies for Core Investments

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  1. Adaptive Asset Allocation Strategies for Core Investments

    Gabe Varga, CMT Website: www.FidelitySignal.com E-mail: axiomix.inc@gmail.com INDIANAPOLIS METRO AREA - TRADERS & INVESTORS May 4, 2013

  2. Adaptive Asset Allocation Strategies for Core Investments

    Change over time, as the economy and the markets change

  3. AdaptiveAsset Allocation Strategies for Core Investments

    Vanguard Target Retirement 2030 - VTHRX Vanguard Target Retirement 2015 - VTXVX http://quotes.morningstar.com/fund/vtxvx/f?t=vtxvx

  4. Adaptive Asset Allocation Strategies for Core Investments

    Definition of strategy: A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem. www.businessdictionary.com/definition/strategy.html Important or essential in relation to a plan of action www.thefreedictionary.com/strategic Definition of tactics: Means by which a strategy is carried out (e.g. stock selection) www.businessdictionary.com/definition/tactics.html

  5. Adaptive Asset Allocation Strategies for Core Investments

    Definition of Core Holding in the Financial Dictionary - An investment expected to be part of a portfolio over a long period of time. Examples: retirement account with mutual fund holdings, blue chip stock portfolio Trading accounts and core investment holdings are usually managed differently
  6. Markets are in unstable disequilibrium
  7. Tail events can happen unpredictably
  8. Mathematical foundation using fractal theory
  9. Theory of reflexivity; Unstable disequilibrium
  10. The psychology of bubbles and crashes (booms and busts) has not changed over the centuries
  11. Prospect theory describes the influence of fear, greed, and hope on human decision-making
  12. The 3 'M's of trading Mind, Method & Money Management
  13. Technical analysis provides powerful methods (e.g. moving averages) for entry/exit
  14. Psychology of booms/busts have not changed Trend following using technical analysis tools (e.g. 100 day moving average) is a great way to invest What did we learn?
  15. Psychology of booms/busts have not changed Trend following using technical analysis tools (e.g. 100 day moving average) is a great way to invest Cannot assume that the market will be higher in the future What did we learn?
  16. Psychology of booms/busts have not changed Trend following using technical analysis tools (e.g. 100 day moving average) is a great way to invest Cannot assume that the market will be higher in the future Markets have changed electronic trading became dominant and financial markets seem to be more volatile now the buy-and-hold strategy that worked so well in the 1980s and 1990s has resulted in extremely high risk and small real return for investors since 2000 What did we learn?
  17. Psychology of booms/busts have not changed Use technical analysis tools Cannot assume that the market will be higher in the future Markets have changed Avoid the buy-and-hold Multi-year bull markets represent the best opportunities for investment gains Avoid being invested during a downtrend Identify “intermediate-term” uptrends and reallocate core investments to adopt to and take advantage of uptrends Investment approach for core holdings Intermediate term uptrend started in December 2012
  18. Why do we need to adapt our asset allocation mix to the market environment?
  19. Long-term study of returns by Ed Easterling
  20. 3 years Fidelity Real Estate Income, FRIFX yield 4.38%
  21. Raising cash reserves as a simple, but effective adaptive strategy 10 years Fidelity Real Estate Income, FRIFX yield 4.38%
  22. FidelitySignal.comis an investment newsletter that makes it easier to start and manage your portfolio of Fidelity mutual funds.
  23. Model portfolios with buy and sell signals
  24. Focused strategy portfolios
  25. Diversification strategy portfolios
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