The successful 100-year portfolio must be able to navigate the secular booms of the Serpent (1947-1963, 1984-2007) while not losing capital on either wing of the revolutionary and regenerative eras of the Hawk (1929-1946, 1964-1983). Though there are no guarantees in investing, our research suggest that the cockroach portfolio has historically provided better returns with less drawdowns than other approaches and we believe that it is likely to do so going forward. In another way, however, the level performance similarity is surprising, given the difference in the non-overlapping allocations of the portfolios; the commodity trend and long volatility allocations of the Hundred Year Portfolio are quite distinct from the cash allocation of the Permanent Portfolio. However, when the offense has a couple of off days, the championship hopes go out the window. In 2018, we set out to solve that problem. Disclaimer: WebThe Philosophy of the Dragon Portfolio The solution to the successful 100-year portfolio is unbelievably simple when you study financial history: find assets that can perform when Opinions expressed are that of the author. A portfolio that will provide strong performance with minimal drawdowns. geed and fear. The mention of specific asset class performance (i.e. But Artemis is going the extra mile here. In a study from Resolve Asset Management2utilizing daily long-term data from 1970 to 2012 for each of the four asset classes (stocks, bonds, cash and gold), the permanent portfolio had an annual growth rate of 8.55% with a maximum drawdown of about 18%. From what Ive read its hard to implement this portfolio unless you are an accredited investor. Similar to the All Weather portfolio, the Dragon takes a slightly different approach focusing how to survive a number of different situations from inflation to deflation to just general batshit craziness. Brownes historical perspective from the 1970s and early 1980s was very different. Together, they touch on how Cole thinks about portfolio construction, the paradoxically active nature of the 100-Year Portfolio, and the hurdles that investors looking to DIY might face in building their own versions of the Dragon. If you are interested, I recommend you read the paper, its a different style of reading, filled with mythological references and plenty of unique art. Another inherent limitation on these results is that the allocation decisions reflected in the performance record were not made under actual market conditions and, therefore, cannot completely account for the impact of financial risk in actual trading. by JackoC Sun Oct 11, 2020 12:55 pm, Post by JoMoney Sat Oct 10, 2020 9:55 am, Post A dragon portfolio that grows and protects wealth for 100 years By utilizing trend strategies on financials such as stocks and bonds, they can do well in an extended recession or bear market. Chris Cole -- Implementing the Dragon Portfolio, Only pay $239 for 1 year of Real Vision video access. by MarkRoulo Sat Oct 10, 2020 10:00 am, Post Typically during deflationary crashes cash, hard assets and long volatility strategies work best. However, trend following generally requires active trading (constantly buying and selling), which takes more work than I generally want to do. When I first started looking at assets like these, the idea of allocating capital to lower returning assets, seems dumb. Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Its having hurricane insurance that doesnt just rebuild your house, but leaves it better than it was before the storm at a compounding non linear rate. It was a formative year for a lot of people. There are five components of the dragon portfolio: equities, fixed income, gold, commodity trend and long volatility. However, the math behind it tells a different story. Another class of investors believes they can always time the wild cycles of risk when, in fact, they can barely manage the demons of their geed and fear. Fixed Income: 20% U.S. 20+ Year Treasuries, Long Volatility: 20% CBOE Long Volatility Index. Chris Cole, CIO of Artemis Capital, sits down with Jason Buck, CIO of Mutiny Fund, to go beyond the theory and discuss how Cole actually plans on implementing The Dragon Portfolio. But lets look at a more recent time period. by nisiprius Sat Oct 10, 2020 10:15 am, Post Thats why Mr. Cole recommends professional money management of the portfolio as the only true way to achieve its results. Because of this, long volatility has a negative correlation to stocks, and provides an important hedging function. Why not invest in something that will be resilient in the face of all turmoil? What does a portfolio look like over many, many, many different investment cycles spanning booming growth, nasty drawdowns, inflation, stagflation, and everything in between. In a period of structural growth these asset classes do very well, and baby boomers had great returns, but what happens in a time of crisis, when deflation or inflation rear their ugly heads? by JackoC Mon Oct 12, 2020 9:34 pm, Post The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets. The easiest way to become a dragon is to do it through Artemis Capital, but this would require being an accredited investor (basically you need to be a millionaire). How did silver and gold do from 1980 - 2000 compared to stocks and bonds? These performance figures should not be relied on independent of the individual advisors disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisors track record. In the same way, a portfolio requires both offensive assets like stocks and bonds, but also defensive assets. managed futures did well, stocks were down, bonds were up) is based on RCMs direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes. The Dragon Portfolio is based on historical research stretching back to the 1920s that Our search for better answers led us to studying many portfolios and asset allocation strategies. Commodity trend has been around for a long time and, importantly, its historic performance has had low correlation to stocks, bond and gold. The mention of market based performance (i.e. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. This trend following strategy is applied across a basket of commodities. Lets dive into what makes the Dragon different. Before we examine the specifics, its important to note that Mr. Cole central tenet is that investors should diversify across market regimes rather than asset classes. Bad times are always lurking around the corner. Many investors assemble a varied portfolio of asset classes thinking there is safety in diversification, but in a crisis, the portfolio is exposed as a leveraged long-growth portfolio with no real diversification at all. As we spoke with more and more people, we realized that we were not the only people looking to solve this problem and decided to launch our long volatility strategy to the investing public in 2020. +3.2%, -4.6%) is based on the noted source index (i.e. MacroVoices Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own. https://t.co/ApBBKdNYhp. Brownes approach showed the world that to be truly diversified, investors need something that reacts positively to defensive environments including recessions and risk events like 2008 and periods of sustained inflation like the 1970s. market regimes created a perfect laboratory test for Mr. Coles thesis which in turn generated a 50% return for his Dragon portfolio versus The Dragon portfolio describes itself as a 100 year portfolio. Another class of investors believes they can always time the wild cycles of risk when, in fact, they can barely manage the demons of their geed and fear. So, when we were sent the latest research piece by Chris Cole of Artemis, we dug in (you can read the piece here). WebThe dragon portfolio consists of: 24% Equity-linked 18% Fixed income 19% Gold 18% Commodity trend 21% Long volatility So, thats the allocation I plan of using. Witness the disastrous performance of the OIL ETF when the futures market went into negative pricing. In the wake of 2008, one thing in particular became clear: traditional approaches to diversification were not working. Dragon, according to philosopher Pliney the Elder, being a serpent so tightly wound around a hawk that they appear as a single animal, a sort of 'winged serpent. If this is the case, it will interesting to see to what extent the commodity trend and long volatility components bolster the performance of the Hundred Year Portfolio, and how its performance compares to that of the Permanent Portfolio. But Artemis is going the extra mile here. Only post material thats relevant to the topic being discussed. by Forester Sun Oct 11, 2020 6:21 am, Post Stocks and bonds have been ripping for 40 years, so many investors have decided to base their entire investing strategy around only those two assets. The Artemis Capital Dragon Portfolio (Explained) You know Chris Cole from his firm Artemis Capital and numerous appearances on Real Vision and Macro Voices. Christopher R. Cole, CFA, is the founder of Artemis Capital Management LP and the CIO of the Artemis Vega Fund LP.
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