Why Rotation among Index Funds?
How long will a position be held? Why is rotation necessary? The table
to the left shows that market leadership is constantly changing. Any investor needs a method to be in the "right
place and the right time." Our objective is to minimize adjustments to 2 or 3 per year.
Our index fund sector research team compiles continuously updated sector
rankings corresponding to the 21 choices in the IBM Savings Plan. These rankings are in terms of a proprietary total
return metric called the RAS parameter. When taken in the context of a periodic portfolio reallocation, the RAS parameter
has predictive value. Higher ranked investments perform better over the next 6 to 18 months than lower ranked investments.
Rankings are performed weekly from our database, and form the basis of our 2 to 3 portfolio adjustments each year.
Nearing or in retirement?
Many individuals who are near or in retirement may feel unwilling to accept the risk associated with our occasional heavy
equity positions, and have decided on their own to use the PowerIndex recommendations on only 50% (for example) of their portfolio,
and put the remaining 50% into the ultimate safety of the Stable Value Fund. For such individuals, we believe that this
is an excellent strategy. We will leave the actual math to you. We are now tracking the cumulative performance
this 50-50 PowerIndex Portfolio on the front page of the website, plotted in heavy green. It has clearly less volatility
than any other equity portfolio, including no down year during the period plotted.
While we ourselves are fully risk adverse, and in fact are in retirement, we still invest fully as the PowerIndex Portfolio,
largely due to the fact we plan deferring withdrawls for several years until the mandatory age.
We are dedicated to our clients. We believe in one word: excellence. We think this commitment shows in all our products
and services. The Principals of RAS Partners manage their own and their family investments exactly in line with the PowerIndex
portfolio recommendations. We believe what is best for us is also best for our clients.