Tuesday, January 1, 2013

"Balanced Portfolio" Trading Strategy

Hahaha..  Several things funny here.    this comment from greaterfool.ca  is unconnected to this blog.
  • Turner's market-beating   trading  "rebalancing" strategy is exposed
  • ...along with .. a 1% weighting in gold ? 
1% ?!  : )

 ...or, 99% "paper" (imaginary, subject to vaporization-without-notice-type-wealth)

#117 skeptical on 12.31.12 at 10:59 am  
(not connected to this blog) 

No silver. And all is in balance. — Garth
really? after telling everyone on this blog to sell all their PM holdings…
stunning. absolutely stunning.
Stunning is how thick most people are (like you) about rebalancing. A diversified portfolio contains many asset classes, held to a strict weighting. When my PMs rise over 1% (the current weighting), I sell. When they fall, I buy. Obviously I took my profits each time I told you to. Did you listen? — Garth
Also quite stunning is how rude some people are, like you Turner, given your dire performance over the years.  

What is more interesting though is his market-beating trading re-balancing techniques, as presumably everything is going up and down all the time? ..Must be a whole lot of buying and selling going on.. ?  ..and from the same post..

#205 DJB on 12.31.12 at 9:12 pm

Garth, did you come across this story this week?
So far this year, hedge funds and bond managers have struggled to show their investors gains. According to Goldman Sachs, the average hedge fund has returned only 4.6 percent this year so far, underperforming the benchmark S&P 500 index by more than 7 percent. What’s worse – only 11 percent of managers were able to outperform the S&P 500.
According to the Economist, the S&P 500 has now outperformed its hedge-fund rival for ten straight years, with the exception of 2008 when both fell sharply.
So don’t buy hedge funds. — Garth

..Clearly, an ex politician, whose timing, market and business instincts have been wrong on every prediction made since 1987 can easily outperform all those professional fund managers and traders. The delusion is strong with this one..

With regards the S&P outperforming the majority of fund managers, one should be looking at what the managers who are outperforming are doing..  


There was clearly a bubble top there in the 2000s (at the time, Turner was calling for Dow 30-50k)  and prospective advisees should consider very carefully his previous history of predictions on stocks and the results

From Turner's Financial Advisory Year End Results
We are always aware our main obligation to you is to preserve your capital. We pursue growth within this mandate. 
We are pleased to report the model portfolio described above has achieved a return of 9.22% in 2012, with the three-year average being 7.82%.

A straight 50:50 Gold:Silver "buy and hold" has returned a combined 7.9% appreciation (priced in $ USD) at close of trading in 2012 and a 3 year average of 21% per annum (63.5% over the 3 years) 

But most importantly of all, this was achieved with zero counterparty risk, which absolutely cannot be said for Turner's "balanced portfolios" and especially so when you factor in the implied trading risk  due to "re-balancing" on your behalf along the way.  
Being reasonably acquainted with the whole trading  rebalancing thing, these idiots are under the firm impression that the more re-balancing that is done on your behalf by Mr Turner, the greater your risk.

Mr Turner also carefully avoids the fact that in 2011 his Balanced Portfolio returned a negative figure and could of course do the same any year, whether under constant "re-balancing" or not.  

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