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Disclaimer

As an investor, you know that any kind of investment opportunity has its risks. There is no such thing as low risk stocks or options trades, and we recommend you invest wisely. Investing in stocks and options is highly speculative. All of the content on our website, in or newsletter, and in our email alerts is for informational purposes only, and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. Remember, you should always consult with a licensed securities professional before purchasing or selling securities of companies profiled or discussed in the Gamma One newsletter.

Brian Dunn, Black Elm Advisers LLC founder, is a Registered Investment Adviser. Gamma One and Black Elm Advisers LLC are not affiliated companies and the content contained in Gamma One is not endorsed by Black Elm Advisers LLC. Black Elm Advisers LLC has advertising and marketing arrangements with parties that are not registered or regulated as broker-dealers, such as Gamma One, and as part of these arrangements; Black Elm Advisers LLC may pay fees or provide other forms of compensation in exchange for marketing.

Brian and his team may have a financial interest in Gamma One’s picks as they trade many of the same equities and options they select.

Brian Dunn and Gamma One (Company) is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or options customers should buy or sell for themselves.

It should not be assumed that the methods, techniques, or indicators developed at Gamma One will be profitable or that they will not result in losses. nor should it be assumed that future picks will be profitable or will equal past performance.

RISK DISCLOSURE: Options involve substantial risk and are not suitable for all investors. Please read "Characteristics and Risks of Standardized Options" prior to investing in options. Evaluate any strategy prior to use to understand risk and suitability.

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Global Tactical Asset Allocation Strategy

The Art of Balancing Risk and Reward Through Asset Allocation

Asset Allocation Strategy Performance

+ 10.18% Annualized Return Since Inception
YearAnnualized ReturnAnnualized, Since InceptionValue of $10,000 Invested 1-Aug 2019
Through September 202415.94% YTD10.18%$15,515
2023– 1.36%7.13%$13,210
2022– 4.18%9.74%$13,409
202116.35%16.19%$14,408
20209.82%10.81%$11,622
*Unaudited results. Past performance is no guarantee of future results. Review the disclaimer for details.

The Story behind the Global Tactical Asset Allocation Strategy

Introduction

Welcome to Gamma One’s innovative asset allocation strategy, inspired by the groundbreaking ideas presented in Wesley Gray’s article “The Advantages of Simple Allocation Strategies.” Gray’s research delves into the benefits of a well-balanced portfolio that seeks to replicate the high returns of Yale’s endowment, as first detailed in “The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets.”
Gray proposes an equal-weighted portfolio across five main asset classes:
 
• Domestic Equity: S&P 500 Total Return Index
• International Equity: MSCI EAFE Total Return Index
• Real Estate: FTSE NAREIT All Equity REITs Total Return Index
• Commodities: Goldman Sachs Commodity Index
• Bonds: Merrill Lynch 7 to 10-year Government Bond Index
 
Our continued research has led us to further enhancements that can potentially boost the returns of this balanced portfolio approach.

The Next Step in Portfolio Refinement

Faber takes portfolio management to the next level in “A Quantitative Approach to Tactical Asset Allocation,” introducing additional asset classes and exploring their impact on volatility, drawdowns, and risk-adjusted returns.
 
Paul Novell, in his “Investing for a Living Blog,” meticulously examines the historical returns of various Ivy portfolio variations from 1973 to 2013, a period marked by both unparalleled growth and devastating crashes like those in 1987 and 2008. 

A Winning Strategy for Long-Term Success

Building on the insights, expertise, and portfolio data highlighted in Novell’s article, Gamma One proudly recommends the “Global Tactical Asset Allocation Aggressive 6” (GTAA AGG 6) portfolio for long-term accounts. This dynamic GTAA portfolio incorporates 13 distinct asset classes:
  • US Large-Cap Value
  • US Large-Cap Momentum
  • US Small-Cap Value
  • US Small-Cap Momentum
  • Foreign Developed Market
  • Foreign Emerging Market
  • US 10-year Government Bonds
  • Foreign 10-year Government Bonds
  • US Corporate Bonds
  • US 30-year Government Bonds
  • Commodities: Diversified
  • Commodities: Gold
  • Real Estate Investment Trusts
Each month, these asset classes are ranked based on 1-month, 3-month, 6-month, and 12-month returns, with the top 6 potentially receiving equal weighting in the customer’s portfolio.
These top 6 asset classes are then scrutinized to ensure they are trading more than 1% above their 200-day moving average. If an asset class falls short, the corresponding 1/6 of the portfolio remains in cash. If it surpasses the threshold, that 1/6 portion of the account is invested in the corresponding ETF.

Daily monitoring of the 200-day moving averages enables timely sales of underperforming sectors and runaway sector downturns, cutting losses quickly and moving to cash until the next month’s reallocation. This dynamic approach allows for a customer’s portfolio to be 100% in cash, evenly distributed across the top 6 asset classes, or a blend of both.

The GTAA AGG 6 portfolio boasts an impressive track record based on 40 years of data from 1973 to 2013, with an average return of 17.72%, a worst-year performance of -5.76%, and a Sharpe Ratio of 1.22 — signifying superior risk-adjusted returns.

Trust in Gamma One to help you achieve long-term financial success through our innovative implementation of the Global Tactical Asset Allocation Strategy.

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