Golden Butterfly & 60/40 vs Triad+
Not long ago I did a post about how TAA does against fixed allocation strategies like 60/40 and Golden Butterfly. It is time to update the data now that we have Triad+ in our arsenal.
In the original post I said:
It is easy to see why people like allocations that are rebalanced annual. Whether you invest in a 60/40 allocation, All Weather, Permanent Portfolio, Golden Butterfly or others - the appeal is near market returns over time without the highs and lows. We prefer technical asset allocation which generally may have a change of investment at the end of any given month. Are we rewarded for the more 'fiddling' with our investments than those who invest in an allocation that is only rebalanced annually? Let's take a look.
I ran results on PortfolioVisualizer for Golden Butterfly, 60/40, and Permanent Portfolio, results here. From 1992, as far back as I could get the results, through Jan 2022, Golden Butterfly has the best combination of returns and maximum drawdown. Because Golden Butterfly took the Gold out of these three, I will compare it to the DMS strategies which never use any leverage, that is Triad and The Russell OG. These two DMS strategies may have a change of investment at the end of every month, Golden Butterfly is a buy and hold that is rebalanced annually. How do they compare?
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In this updated post I am comparing the traditional 60/40 balanced portfolio and Golden Butterfly against a single DMS Strategy, Triad+. Let's see how it looks over the long run. And please keep in mind that Triad+ was really designed to outperform going forward, it was pure joy to realize it outperformed in the past as well.
It is easy to see why people like allocations that are rebalanced annual. Whether you invest in a 60/40 allocation, All Weather, Permanent Portfolio, Golden Butterfly or others - the appeal is near market returns over time without the highs and lows. We prefer technical asset allocation which generally may have a change of investment at the end of any given month. Are we rewarded for the more 'fiddling' with our investments than those who invest in an allocation that is only rebalanced annually? Let's take a look.
I ran results on PortfolioVisualizer for Golden Butterfly, 60/40, and Permanent Portfolio, results here. From 1992, as far back as I could get the results, through Jan 2022, Golden Butterfly has the best combination of returns and maximum drawdown. Because Golden Butterfly took the Gold out of these three, I will compare it to the DMS strategies which never use any leverage, that is Triad and The Russell OG. These two DMS strategies may have a change of investment at the end of every month, Golden Butterfly is a buy and hold that is rebalanced annually. How do they compare?
- - -
In this updated post I am comparing the traditional 60/40 balanced portfolio and Golden Butterfly against a single DMS Strategy, Triad+. Let's see how it looks over the long run. And please keep in mind that Triad+ was really designed to outperform going forward, it was pure joy to realize it outperformed in the past as well.
The metrics and chart speak for themselves, Triad+ is a really special strategy which I am rather proud of. Not only is the downside and volatility limited, but the upside is more unbridled, it makes for a terrific strategy on it's own, or used in a combination of strategies.
All respect to Tyler for his Golden Butterfly, and understanding that there are people who don't want to have to potentially change their allocation at any given month end, however, we see that there is a nice upside for that small barrier to entry. Do not forget that going forward, as Golden Butterfly remains in long term treasuries, the spread in performance may continue to increase because Triad+ never uses long term duration treasuries, ever!
All respect to Tyler for his Golden Butterfly, and understanding that there are people who don't want to have to potentially change their allocation at any given month end, however, we see that there is a nice upside for that small barrier to entry. Do not forget that going forward, as Golden Butterfly remains in long term treasuries, the spread in performance may continue to increase because Triad+ never uses long term duration treasuries, ever!