Asset Allocation did not work this year!

Posted: December 30, 2015 in Uncategorized

Well this year not much worked

Year to date (27 Dec)

Australian ASX200 -3.8%


SP500 +2.19%

Bonds (US T Bond 30) -2.04%

US 3 M Cash Bills 0.11%

Commodities -23.42%

Australian Real Estate (average -5%)

Australians did better than this due of the fall of the Australian Dollar.

In practice the classic  asset allocation did not work this year.

The conditions for next year are even more difficult. The main returns were driven by the fall of the Australian Dollar.

One thing that one should have at least learned from 2015 is that crowded trade (where most of the analyst say “do this”) did not work in this market.

A weaker Australian Dollar is the current crowded trade for the next 6 month….so pay attention – it could not work (statistically the first rate hike in US produce a fall in the USD – as the interest rate hike has been anticipated for 18 months).

How did I do this year? About 13% with a quite simple strategy of corporate Australian bond (circa 6%) and the classic sell in May buy in October. And definitely avoiding indexing.

Next year we will see what is the game….but I think more difficult.


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