3/28/2002 - 5/30/2002

Still believing U.S. stocks were overpriced relative to other global asset choices, even in March 2002, two years into a stock slide, we launched our portfolios heavy in foreign, value, smaller-cap and bonds.

5/31/2002 - 7/30/2002

BlackRock closed our no-load international bond fund, CIFIX, to new investors, leaving only sales load options. We still thought the U.S. dollar had a long way to slide (and boy, did it!), so our replacement was the cheap and un-hedged BEGBX. This fund became one of our key areas of outperformance in conservative accounts.

7/31/2002 - 10/30/2002

Stocks continued their virtually straight -down drop since we launched the Powerfunds in March, so it was time to move out of short-term bonds and more into stocks, where we could take advantage of those lower valuations. We took 10% out of SSYPX and added VDIGX. In the summer of 2002, Vanguard Dividend Growth was still a utility fund, Vanguard Utilities Income (VGSUX,) but Vanguard later morphed it into a dividend income fund (VDIGX) due to lack of demand in utility-focused funds. This was the buying opportunity of the decade for lower-risk investors - a 5% yield back then.

10/31/2002 - 2/27/2003

High-yield bonds remained out of favor, as they typically do during market slides. We switched from CMHYX to VWEHX in October 2002, because fund family mergers made Columbia no-load funds a poor choice going forward. We switched our real estate pick from CREEX to SSREX for the same reason. Besides, when you go bond fund, you want to go ultra-low fee. We lost a little here (although not as much as stocks). No biggie - junk bonds were about to turn. VWEHX went up 14% in the next six months.

2/28/2003 - 7/30/2003

Our February 2003 trade saw us sell SDVIX and move into BULIX to regain the utility exposure we lost when VGSUX became a dividend-focused fund. SDVIX was down 26.35% during the time we held it, within a single percentage point of the S&P 500's slide during this period, and we effectively replaced it with VDIGX. We've been enjoying great returns in the fund that became VDIGX for much of the portfolios' ten-year-plus history. Later, investors went overboard on value and income, as they did with growth in the late 1990s.

7/31/2003 - 2/26/2004

After a nice rebound off the 2003 stock market lows, we decided to cut back on risk in our portfolios. We reduced our NOIEX allocation, sold FMIVX for a 9.67% loss (better than S&P by 2.47%) and added short-term bonds in VFSTX. We also got out of real estate by selling REIT fund SSREX for a 23.19% gain, 9.35% over the S&P. With overall risk down, we decided to add some foreign flavor with a new 10% stake in PISRX. Overall, we went from 40-60% stocks/bonds in version five of the Conservative portfolio to 35-65% in version six. We were a little early as it turned out; the stock market (and real estate) had higher to go, but small-cap, foreign-focused PISRX got so hot we almost kept pace while having less portfolio risk.

2/27/2004 - 4/28/2005

Markets were up across the board, and we used that strength to cut back again. We left convertible bonds (which can be stock-like in behavior) by selling NOIEX, cutting PISRX in half, adding BRBPX, and increasing our stake in VFSTX. We even cut back on foreign bond BEGBX after a huge run of 43% since we'd added it to our portfolio. Our trade was a little early again, but better early than during a 50% slide in global markets. This trade slightly reduced our stock allocation, down to about 33%, with bonds up to about 67%, but the new mix also contained generally lower-risk funds.

4/29/2005 - 2/27/2006

Everything we owned in version seven, (except short-term bonds) beat the S&P 500 during the year leading up to this trade. We cut back on some winners and moved into more attractively valued areas. This meant another cut to still-hot BEGBX, total sale of PISRX, cut to BRBPX, cut to white-hot BULIX, a new healthcare holding (XLV), and a move from smaller-cap value to larger-cap growth fund SINGX after years of relative underperformance. We're now down to just 30% stocks and generally less aggressive than previous allocations. As stocks continued going up, we were left in the dust a bit. But markets don't go straight up forever.

2/28/2006 - 10/30/2006

With continued strong markets, we shifted out of outperforming funds into less popular areas. We sold VDIGX (it was attracting way too much attention during the whole dividend craze that was sweeping the nation), and BULIX (for outsized performance and inflows of money), and bought VOX and VUVLX. We kept the broad stock/bond mix at 30/70. VUVLX underperformed for much of the next year.

10/31/2006 - 6/28/2007

Ah, 2007 - the edge of the global financial collapse. We underperformed the stock market during the time period leading up to the crash, but only by about half (not a bad upside tradeoff for just a 30% stock allocation) Our only trade here was selling VOX and buying JARFX on 10/31/06, which initially seemed like a good idea. JARFX rocketed up 20% in the last gasps of foreign stock fund outperformance.

6/29/2007 - 8/30/2007

The great slide really began in October 2007, but during the life of Conservative Portfolio, version 11, we saw some weakness. Our 6/30/07 trade got us out of high-yield bond VWEHX just in time to avoid tough times for that category. We cut back on foreign stocks by selling SINGX, added U.S. growth stocks with VUG, and cut back on value. Expecting market chaos, we added long/short fund ALHIX and increased our investment-grade bond holdings. We could have used U.S. government bond funds, but in general, this trade put us in a reasonably good position to weather the very rough seas ahead.

8/31/2007 - 12/28/2007

In the early stages of the great pullback, foreign markets did well, largely because investors incorrectly believed the U.S. was the problem, when almost the opposite proved true. JARFX tacked on another 9.1% gain in four months, and we added to this position by selling our long/short fund after a strange and ominous short-term plunge in value. This was an early sign of trouble in the fancy finance world of leverage, shorting, subprime debt, etc. We should have gone with more bonds, but rates were too low already - or so we thought.

12/31/2007 - 6/27/2008

We dumped international bonds on 12/31/07 after BEGBX rose another 6.8% in a few short months for an over 70% total return since we'd added it. We put the proceeds of that sale into another long/short fund, NARFX. In theory, this fund raised our stock allocation up to 35%, but in reality, our net stock exposure going into 2008 was at its lowest in the history of the portfolio. We now had only one fund with foreign holdings, a 10% stake in JARFX, and that was a global fund that was about 50% U.S. stocks. The next five years would prove the opposite of the previous: U.S. stocks beat foreign stocks.

6/30/2008 - 10/30/2008

By June of 2008, the poop had officially hit the fan in the stock market, but the Conservative Portfolio was falling quite a bit less than the stock market, despite the fact that new long/short pick NARFX was its only positive gainer. We could have really used a Treasury bond fund. The big hurt was formerly hot JARFX, which was down 37% in four short months. At the end of June, we used the market weakness to get back into junk bonds with a 10% MWHYX stake. We also bought back into VOX and cut safer DBIRX down. We were now 40% stocks, although 5% of that was going up while stocks were going down. Still, a little too early to be buying.

10/31/2008 - 2/26/2009

At the end of October 2008, we went in for more risk, upping our stock allocation to 45%. Closed-end funds were collapsing, partially due to debt problems related to the leverage they employ. It was an opportunity to buy relatively safe assets (muni bonds) at a discount. We put 15% into MUA, increased our VOX allocation, cut back further on safer DBIRX, and made a cut to HABDX. We were a few months early for the bottom, but it was working. Conservative Portfolio version 15 marked our best relative performance period, with a 20% gain over S&P (despite being down 2.78% overall). MUA gained nearly 15% during this time, and telecom fell less than half the S&P.

2/27/2009 - 6/29/2009

What were we doing near the very bottom? Buying financials. We added a 5% stake to XLF, and we wish we'd bought more. This ETF went up nearly 60% in four months. We got rid of MUA after the big pop. We also doubled up on NARFX for a little protection in case the bottom was deeper than we'd thought, and we added some back to HARBX. It's easy to say now, but that may have been the buying opportunity of the last two decades. The 16.85% portfolio gain was short of the S&P 500, but a better ratio than we had on the way down, and the key to long-term outperformance.

6/30/2009 - 5/27/2010

After such a fast move up in financials, we dumped XLF on 6/30/09 for a quick 59.55% gain and were back down to 50% stocks, 50% bonds. Sure, we missed some solid gains by cutting back at this time, but it's a conservative portfolio, and we can't run an elevated stock allocation forever, since the higher and more expensive stocks get, the riskier they become. Our replacement was PIASX, a near-money-market type fund. We were up only about half the market's return during this period, since our more conservative picks didn't keep up with the S&P.

5/28/2010 - 6/29/2010

Conservative Portfolio version 18, we hardly knew ye. During 18's scant one-month existence, the market slid, and the portfolio was nearly flat as all but one of our funds fared better than the S&P. We got out of VUVLX for tepid performance and cut back on JARFX, which fortunately rebounded from severe losses in the crash. We were now down to 45% stocks/55% bonds. We also added safer BULIX back to the mix after some underperformance on the way up.

6/30/2010 - 9/16/2011

Time for a major portfolio makeover. We went down to 40% stocks/60% bonds as the crisis ended and stocks were no longer the bargain they had been. If bonds had yielded more, we'd have moved even more heavily into debt. Our biggest mistake here was getting back too heavily into foreign markets. We liked the underperformance (U.S. markets have been beating foreign markets since the crash) but should have waited, because too many fund investors are still favoring foreign. Strong utilities, telecom, and healthcare have kept us competitive versus the S&P.

9/19/2011 - 8/14/2013

Sharp drops in equities led us to increase our stock allocation marginally, now up to 41%. We increased VGK and added EWJ. The new longer-term bond picks, BLV and EDV, should protect this portfolio in case of another recession. It's going to be difficult delivering low risk and high return as stocks rise and bond yields plummet. We don't expect much more foreign exposure until investors bail after years of underpeformance.

8/15/2013 - 9/26/2014

This late summer trade was a major one as we moved into more out-of-favor funds and categories. The Conservative portfolio was also overdue for a rebalancing. As stocks have raced up in recent years our real money allocation to stocks in the Conservative portfolio was over 50%. This trade brought that number down to 41%.

9/29/2014 - 3/12/2015

We've performed a radical PIMCO-dectomy. Could the sudden departure of PIMCO "Bond King" Bill Gross spell trouble for the firm's funds? While the chances of a full-fledged meltdown might be remote, when it comes to bond funds we like to keep the drama to a minimum.

3/13/2015 - 1/06/2016

On the buy side, the Euro has sunk and it's a good time to start adding investment grade, un-hedged foreign bond funds in the guise of SPDR Barclays Intl Treasury Bond ETF (BWX). On the sell side, utilities have become too popular recently and hence we're saying goodbye to BULIX. We're also down on Junk bonds, which means no more DLFRX

1/07/2016 - 6/28/2018

Adding some riskier yield after a bad year. Adding a risky oil related short for rising default protection. ARTFX growing assets helping performance. More large cap value, less large cap growth after good year. Dumping FMLSX after manager's bad calls on energy. Taking lots of interest rate risk.

6/29/2018 - 2/27/2020

At the end of June we made some trades in the Conservative portfolio largely because one of our holdings, ETRACS 1xMonthly Short Alerian MLP (MLPS), was liquidated for lack of investor interest.

2/28/2020 - 4/02/2020

Our trades here are not only because of the Coronavirus-crash - several of these positions were already on the docket to be sold. The more significant factor was actually the sharp drop in rates related to the plummeting market.

4/03/2020 - 9/10/2020

We executed trades in both portfolios on April 3rd (just over one month after our previous trades on February 28th) to cut way back on corporate bonds and deal with the cash from a liquidated inverse 3x oil ETF that the fund company shut down on March 27.

9/11/2020 - 2/26/2021

These relatively minor changes were primarily to shift us out of some areas that had been hot and to add some lagging stock categories.

2/26/2021 - 11/26/2021

We really thought these trades could be put off until a year after our buying during the COVID crash. Unfortunately there is just too much speculation going on these days not to make some changes.

11/26/2021 - 6/30/2022

These trades are to reduce our stock allocations and exposure to inflation oriented investments made in 2020.

6/30/2022 - 8/15/2023

We made some changes to both model portfolios at the end of June. The end result was a slight increase in stock exposure and an increase in our exposure to interest rates by moving from shorter-term to longer-term bonds. We also made some tweaks to our hedging strategy to protect the portfolios from an increasingly likely drop in high risk debt.

8/15/2023 - Present

One of the ETF holdings in our Conservative portfolio, the NightShares 2000 ETF (NIVM), was liquidated last week. For now, we're shifting the 5% allocation to cash via an ETF specializing in 6-month T-bills. This means we're transitioning from a no-yield cash position to an actual cash-like fund with a much higher yield.