Cliff Smith recently presented a strategy on Seeking Alpha that he calls "Vanguard High Growth Strategy", which can be easily backtested on Portfolio Visualizer from 1988-2015 (1987-2015 without the comparison to the S&P 500), yielding a +15.10% CAGR and -9.09% Max Drawdown with a very smooth and stable equity curve. There are no losing years, the worst return was +2.66% in 2001. The strategy is based on 4 Vanguard mutual funds, which basically means that for the strategy to work efficiently and to avoid commissions, one should have an account with Vanguard.
The selected funds are Vanguard Convertible Securities Fund Investor Shares (VCVSX), Vanguard High-Yield Corporate Fund Investor Shares (VWEHX) and Vanguard Health Care Fund Investor Shares (VGHCX). The strategy stays invested in the selected assets (equal weight) when the monthly adjusted close price of an asset is greater or equal to its 2-month EMA. If not, the specific portfolio slice is invested in Long-term U.S. Treasuries (VUSTX).
One should note that the Vanguard mutual funds have a 30-day minimum holding period. One can use Portfolio Visualizer to track the portfolio investments at the end of each month, and I've also created a dynamic Google spreadsheet for this strategy. It'll be interesting to see if this strategy can maintain as smooth an equity curve as it has over the last almost 3 decades.
QH Vanguard High Growth Spreadsheet
No comments:
Post a Comment