CHAPTER 12AN ACTIVE COMBINED ASSET STRATEGY

Now we can put the three active strategies together. We are going to split all three programs equally. (Other divisions, such as one-half in B&R, as it represents two asset classes, and one-fourth in each of the other two, wouldn’t move the result needle very much.) I will call this portfolio the active combined asset (ACA) portfolio, and rebalance each year-end (see Table 12-1).

ACTIVE COMBINED ASSET PORTFOLIO

As the reader can easily see, ACA’s 39-year compounded return of 15.58 percent was quite impressive. It beat its passive counterpart, PCA, which had a compounded return of 11.34 percent, as shown in Chapter 6, by more than 4 percent and blew away the buy-and-hold return of 10.05 percent by over ...

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