Core Diem vs. Balanced Budget: Update
January 15, 2013
We started this comparison demonstration a mere three months ago and the two portfolios are still running pretty much neck-and-neck, but they’re quite different — so it’ll be most interesting to see what happens with the next disruptive correction.
The relative return since inception for the Core Diem portfolio is +3.1% with an outperformance accuracy of 80%. Both portfolios have outperformed the Wilshire 5000 so far.
Core Diem: As a reminder, we invest an amount each day based on MIPAR into the three top of the top percentile stocks at Manifest Investing (MANIFEST Rank > 99.9). The amount depends on MIPAR. Yesterday, with MIPAR at 7.8%, we invested $7.80 into Coach (COH), Knight Transportation (KNX) and Qualcomm (QCOM). We’re still amazed at the accumulation into a fairly small group of stocks.
We make the same infusion ($7.80 times 3) into the Balanced Budget portfolio, in this case parking it in cash while we deploy between Gundlach’s bond fund and our Value Line Arithmetic Average proxy of three equally-weighted ETFs. The cash equivalents (bonds + cash) level roughly tracks the asset allocation recommendation from the Value Line Selection & Opinion — currently at approximately 45% cash.