Retirement Portfolio

The Retirement Portfolio is our most conservative strategy. The strategy is designed in a way that aims to minimize risk and turnover and invest the fair share of the portfolio is assets that pay dividends or interest rates on a regular basis.

 

Main features of the Retirement Portfolio


  • At least 75% are invested in fixed-income (cash, bonds) or equities with a high dividend-yield at any point in time
  • The share of dividend and interest payments in total portfolio return is higher than in other strategies
  • It has the lowest volatility, the lowest ulcer index, and the smallest drawdowns (both in depth and length) of all our portfolios. 
  • It is rebalanced once a month. No change ever occurs during the month. The number of trades at the end of each month is much lower than in any other strategies (around 1.4 per month on avergae)

 

Performance of the Retirement Portfolio


With these features, the platinum portfolio has delivered since 2006 returns similar to the conservative portfolio but with a lower volatility, smaller drawdowns and a smoother equity curve. Such features are key for retirees who must protect their capital at any point in time. The table below compares the performance of the conservative portfolio, the retirement portfolio and the benchmark:

Data for 2006-2012

Model Conservative Retirement Benchmark
CAGR +12.3% +13.3% +6.2%
Volatility 8.4% 6.8% 7.9%
Drawdown -5.5% -4.1% -23.1%
Positive months 66.7% 72.6% 66.7%

 

Technical notes: CAGR is the Compounded Annual Gross Return. Volatilty is the volatility of monthly returns. Max Drawdown is the maximum drawdown based on monthly returns. The benchmark is a traditional mix 50% equities (SPY) and 50% Treasuries (IEF).


 

If you want to see more data on the risks involved by our different portfolio, we have a more detailed version of the above table including many risk metrics. It confirms that the risks incurred by the Retirement portfolio are, by any metric, very low. Learn more.

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You can also see a simple example on how these principles can work in practice by checking our basic Sector Switch Strategy: we will fully detail the set of rules of a simple strategy that switches at the beggining of every month to the two best performing sectors in the U.S. stock market.


Additional Statistics


  • Yearly Performance Data

    Year Retirement Portfolio
    2006 14.1%
    2007 19.3%
    2008 16.6%
    2009 16.6%
    2010 11.4%
    2011 11.6%
    2012 3.9%

  • Monthly Performance Data

    Month Retirement Portfolio
    Jan-06 1.96%
    Feb-06 0.10%
    Mar-06 0.47%
    Apr-06 1.90%
    May-06 -0.46%
    Jun-06 -0.61%
    Jul-06 1.89%
    Aug-06 1.69%
    Sep-06 -0.45%
    Oct-06 2.60%
    Nov-06 2.55%
    Dec-06 1.67%
    Jan-07 0.15%
    Feb-07 0.94%
    Mar-07 0.77%
    Apr-07 3.29%
    May-07 1.69%
    Jun-07 -1.67%
    Jul-07 0.06%
    Aug-07 1.98%
    Sep-07 5.49%
    Oct-07 4.85%
    Nov-07 -0.33%
    Dec-07 0.81%
    Jan-08 3.05%
    Feb-08 2.34%
    Mar-08 -1.49%
    Apr-08 -1.97%
    May-08 0.16%
    Jun-08 2.15%
    Jul-08 0.23%
    Aug-08 0.76%
    Sep-08 -1.26%
    Oct-08 1.92%
    Nov-08 3.36%
    Dec-08 6.51%
    Jan-09 -4.1%
    Feb-09 0.94%
    Mar-09 0.05%
    Apr-09 -0.46%
    May-09 5.03%
    Jun-09 -0.75%
    Jul-09 4.59%
    Aug-09 2.28%
    Sep-09 4.14%
    Oct-09 0.41%
    Nov-09 5.12%
    Dec-09 -1.30%
    Jan-10 -2.10%
    Feb-10 2.06%
    Mar-10 3.37%
    Apr-10 2.42%
    May-10 -1.52%
    Jun-10 2.88%
    Jul-10 -0.49%
    Aug-10 1.28%
    Sep-10 0.61%
    Oct-10 0.83%
    Nov-10 -0.98%
    Dec-10 2.65%
    Jan-11 0.15%
    Feb-11 2.37%
    Mar-11 0.78%
    Apr-11 4.17%
    May-11 0.11%
    Jun-11 -1.8%
    Jul-11 0.60%
    Aug-11 4.75%
    Sep-11 -0.93%
    Oct-11 -0.22%