Mama Bear Portfolio
The Mama Bear Portfolio broadly consists of the investing universe of nine asset classes shown below. The portfolio holds roughly equal-weight positions in up to three low-cost funds, which are determined by the strategy rules shown below.
Equity Asset Classes
- US large-cap stocks
- US small-cap stocks
- Developed-market large-cap stocks
- Emerging-market stocks
Fixed-Income Asset Classes
- US Treasury bonds, long-term
- Cash (US T-bills, 1 to 12 months)
Alternative Asset Classes
- US real-estate investment trusts
- Commodities
- Gold
Strategy rules
- Select the last trading day of the month, or any other trading day of the month, to reallocate the portfolio.
- Before market close that day, note the three funds with the highest 5-month total return.
- Sell any fund that is not ranked in the top three.
- Use the cash from any such sale to buy any fund the portfolio doesn’t already hold that is now in the top three.
- If the portfolio already owns all three top-rated funds because of a previous month’s rankings, do nothing.
- Rebalance the three positions back to equal weight only if a position is more than 20% off its ideal 1/3 weight.
Papa Bear Portfolio
The Papa Bear Portfolio broadly consists of the investing universe of 13 asset classes shown below. The portfolio holds roughly equal-weight positions in up to three low-cost funds, which are determined by the strategy rules shown below.
Equity Asset Classes
- US large-cap value stocks
- US large-cap growth stocks
- US small-cap value stocks
- US small-cap growth stocks
- Developed-market stocks
- Emerging-market stocks
Fixed-Income Asset Classes
- US Treasury bonds, 30-year
- US Treasury notes, 10-year
- US high-quality corporate bonds
- Non-US government & corp. bonds
Alternative Asset Classes
- US real-estate investment trusts
- Commodities
- Gold
Strategy rules
- Select the last trading day of the month, or any other trading day of the month, to reallocate the portfolio.
- Before market close that day, note the three funds with the highest average of 1, 3, 6, and 12 mo. total return.
- Sell any fund that is not ranked in the top three.
- Use the cash from any such sale to buy any fund the portfolio doesn’t already hold that is now in the top three.
- If the portfolio already owns all three top-rated funds because of a previous month’s rankings, do nothing.
- Rebalance the three positions back to equal weight only if a position is more than 20% off its ideal 1/3 weight.
Baby Bear Portfolio
The Baby Bear Portfolio broadly consists of the investing universe of two asset classes shown below. The portfolio is for US investors who desire the simplest possible strategy; it is not a Muscular Portfolio. The portfolio holds roughly equal-weight positions in two low-cost funds, the allocation of which is determined by the strategy rules shown below.
Equity Asset Classes
- US total stock market
Fixed-Income Asset Classes
- US total bond market
Strategy rules
- Start out by buying equal dollar amounts of each fund.
- Near year-end, rebalance the two funds to equal weight.
- At any time of year, deposit any new monies into the smaller position to rebalance it (to the extent possible).