Our Dynamic Asset Allocation Methodology

How does it work?

In one way or another, almost every person asks this question at some point in our conversation, when they see the chart of how well my asset allocation theoretical backtests have performed versus the individual components of my portfolio models. I’ve described it lots of ways, but here is an interactive time-lapse chart of the Portfolio Wisdom 12 Asset Growth Model asset allocations from 1994-2011.

Here are the steps you must follow to see the changes properly displayed. Starting clockwise at the top of the chart below:

  1. Along the top of the chart, toward the right corner, click on the middle tab signifying a bar chart.
  2. Along the right side of the chart, near the top, click on the COLOR drop down selector and choose “UNIQUE COLORS”.
  3. Along the right side of the chart, just above the middle, check all of the asset classes shown.
  4. Along the bottom of the chart, click on the ORDER drop down selector, and choose “ALPHABETICAL”.
  5. Along the bottom of the chart, near the left corner, there is a small PLAYBACK SPEED arrow. Click and pull it down to the slowest setting.
  6. Along the bottom of the chart, at the left corner, click on the “PLAY” arrow.
  7. Enjoy! Notice how the allocations, especially CASH changed during and after the crash at the end of 2008!

Here is the Portfolio Wisdom 12 Asset Conservative Model

If you want to open this gadget in a separate browser window, use the following link and navigate to the spreadsheet tabs named Growth Model 1994-2011 and Conservative Model 1994-2011. The actual allocation data produced by the Portfolio Wisdom algorithms for each week during 1994-2011 is shown on the other sheets.
Thanks.

PortfolioWisdom Conservative Model Allocations from 1994-2011