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The Israelsen Portfolio Is Holding Up Nicely in 2008 (so far)
By JLP | June 10, 2008
Here’s an update on the Israelsen Portfolio I mentioned back in March. You can click on the graphic to see a larger version.
As you can see, it’s held up nicely so far this year. Of course the performance has been buoyed by the nearly 36% return of the iPath S&P GSCI Total Return Index (GSP). To learn more about this portfolio, read Craig Israelsen’s article, The Benefits of Low Correlation, that was published in the November/December 2007 issue of The Journal of Indexes. The article uses the actual indexes. I then created the same portfolio using exchange-traded funds. The portfolio could also be created using low-cost mutual funds.
Of course there’s no guarantee that this portfolio will continue to perform well in the future (but you already knew that).
Update on the Magic Formula Portfolio. I have decided not to continue updating the Magic Formula Portfolio. Why? Because it’s a lot of work. I didn’t abandon the portfolio because of its poor performance. In fact, I still believe that the strategy has the potential to work over the long run. I just wanted to let you know in case you were wondering why I hadn’t posted up an update.
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