Just a quick note from Alpha Vee . . . the fixed income allocation on their risk managed strategies is pivoting to better cope with the current real interest rate environment.
As they note:
The strategies will incorporate an additional risk management rule to mitigate fluctuations in inflation rates. The Treasury Bond portion of the strategies will switch from IEF (iShares 7-10 Year Treasury Bond ETF ) to TIP (iShares TIPS Bond ETF) when the US inflation rate is elevated.
That's definitely where we are now. We applaud any manager that acknowledges the reality of the world we live in.
Real yields remain negative across much of the Treasury curve, forcing investors to reach for TIPS in order to have any chance at all of even staying above water.
Alpha Vee has the flexibility to switch, the discipline to do it and the presence of mind to know it makes sense. That's what models-based investing is all about.
When some corner of the market isn't working, you swerve. Otherwise, simply repeating a move that no longer makes sense and hoping for different results amounts to insanity. That's not Alpha Vee.
