Asset allocation is an investment strategy used to reduce risk and volatility in a portfolio.  All of our models utilize asset allocation by dividing investments among some combination of indexed mutual funds that invest in Foreign stocks, Domestic stocks, Government Bonds, U.S. Dollar and High Yield Bonds.  We add a new twist, by including an absolute return element to the process. We actively switch between funds that are long or short in each of the asset classes.  In addition, some of the funds use leverage as high as two times the index that they track.  We casually refer to it as "asset allocation on steroids".  It's actually a hybrid, and as far as we know, is unique to this site.

Absolute Return Asset Allocation Portfolio

For some time we have been working on an absolute return asset allocation portfolio that is suitable for larger accounts.  We hope to complete the development process and start trading the model sometime during 2009.  Assets will be spread across many asset classes, possibly as many as ten to sixteen, and will switch between long and short funds in all asset classes.  In addition, we will invest in funds that utilize leverage as high as two times the indexes they track.

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