Triad
The Balanced 60/40 portfolio has been loved by, and performed well for a very long time, however, with the Bond Bull Market seemingly coming to and end we now likely face a long period of time of rising rates which is not a great environment for a buy and hold bond investment - which is 40% of a 60/40 portfolio. There must be a better strategy going forward. I had the need in a few accounts for a low volatility low drawdown but decent return portfolio, really gave some thought to the likely new rising rate environment and how I could develop a new strategy which performed pretty close to a 60/40 in historical returns, and one that would likely do much better than a 60/40 going forward. The result of this effort is the Triad strategy, it should far exceed the performance of a 60/40 going forward, and it actually does very well in the past, far better than I would have guessed.
Triad invests 1/3rd into each of the two equity positions, and 1/6th into a gold position if they show to have positive momentum: Gold (SGOL), the Russell 1000 (IWB), and the Russell MidCap Value (IWS). If any of those three components don't have positive momentum, then those funds get invested into the best relative performer of: Short Term Treasuries, Short Term Corporate Investment Grade Corporate Bonds, or Intermediate Term Treasuries.
Even though the Treasuries and Bonds used by Triad have a maximum duration of Intermediate Term, the strategy does not lack when compared to a 60/40, these three options may be more mild mannered compared to longer duration, but they work really well in keeping the parked money earning returns without causing a lot of volatility.
This strategy is suitable for Whale investors with allocations in excess of $2.5 million.
See the reporting decks for more detailed investment performance and metric information.
The inception date for Triad is April 2021. When this strategy was conceived, I had monthly return data from 2000 through 2020, this was the In Sample time for the strategy, which means that I had results for that period and could see how the strategy performed during that period of time. I have subsequently got data back to 1980, from 1980 through 2000, and the time from April 2021 through current are Out of Sample periods of time, meaning the strategy never saw those returns, the strategy had already been finalized. Triad was updated for October 2021, previously it would invest up to 1/3rd into gold, that has been dialed down to a 1/6th position.