In the last months update I noted the Helical Portfolio was 44% cash and thus unbalanced to low risk. I would like to guide this portfolio to an even spread of 1/3 low, medium, and high risk, but will deviate from that as conditions dictate, i.e. when I do deviate I note why. While I do think the market is overbought and there is lots of concern that a correction may be coming, I don't think things are so concerning that nearly half the port in cash is justified. Also, like most investors I am subject to behavioral quirks, and find it difficult to be overly patient in an market that has risen until recently. So to pacify my brain and reduce cash, I have made a couple of modest additions to the portfolio. [more]
Healthcare News Week of 10/15/12 [more]
Healthcare News Week starting 10/8/12 [more]
Some news of note from the week. Select stories with some brief commentary. Not sure how consistent I will be with this kind of summary, but we'll see. [more]
Each election season the New England Journal of Medicine captures the difference in the platforms of the two major candidates in regard to healthcare policies. [more]
I have intentionally modeled the Helical Portfolio on the pyramidal behavioral framework. This structure is described in the Shefrin and Statman 2000 paper “Behavioral Portfolio Theory”. The BPT theory considers how investors deal with the potentially conflicting goals of both increasing and preserving wealth. I found reading this paper to be a bit of a watershed event in my approach to investing, as it well described how I tended to invest, despite my efforts to frame my portfolios along the lines of more traditional pie charted allocation spaces more consistent with Modern Portfolio Theory (MPT). I have found the behavioral model be …. ‘embraceable’ may be the best description.
So I enjoyed reading this 2004 paper by Gregory Curtis that looks at both theories and considers their strengths and shortcomings. [more]
The Helical Portfolio is now 21 months old, and as I noted last month currently cash heavy. The market continues to chug along, and I continue to be nervous and seemingly overly cautious. I intended this portfolio to be monolithic in regards to risk, which in the behavioral framework I employ means 1/3 low risk, 1/3 medium risk, and 1/3 speculation. As with any framework this is just a guide, a tool whose purpose is to force me to explain (to myself) why I deviate from it when I do. Before revisiting the risk profile of the portfolio, the numbers to date. [more]