VTS Community,

I want to follow up on yesterdays post and answer a few questions that came in about the VTS Aggressive Vol Strategy and then we’ll move on to daily blogs as usual.  Now there weren’t many questions at all so hopefully that means the video was a reasonable explanation, but as always you can ask me anything you like.

 

1)  “Which tickers does the VTS Aggressive strategy use?”

SVXY  –  ProShares short VIX Short-Term Futures
VIXY  –  ProShares VIX Short-Term Futures

Basically the SVXY is nearly identical to the XIV, and the VIXY is nearly identical to the VXX.    Here they all are on a chart and you can see they track each other quite closely:



I like to use different tickers for each strategy because I’m sure there will be a few of the more active ones in our community that will elect to follow more than one strategy.  That’s much easier to do when all the strategies use a different underlying.

 

2)  “If I want to move into the new strategy, should I begin tomorrow or wait for the next new signal?”

Remember the plan here is to be investing in volatility for many years to come, so what happens from day to day or even month to month is mostly just noise.  If we’re patient I have high confidence we’ll all be very happy in the long run.

My general investing philosophy is that I don’t try to predict markets in the short-run.  This is why I trade systematically with rules based strategies that don’t require any market timing.  We just take what comes and focus on the long-run.

VTS Aggressive Vol is currently Long SVXY.  If you feel comfortable by all means it’s a valid signal.  If you do feel like waiting for the next fresh entry point, that works just fine as well.  It’s possible the markets turn here and that signal loses money, but of course it’s also possible we are about to see another leg up in the markets.
My success over the years comes in large part because I don’t make those guesses.  I just trade the math.

 

3)  “Where can I see the performance?”
It’s on the website so you can view the strategy page by clicking here.  Of course I’m a very boring person so it’s in the same style as the main strategy.  The most creative I really get is to change the colors, so the VTS Aggressive Vol is yellow  (thrilling I know…)

 

4)  “Will it become part of the Total Portfolio Solution?”
No, the diversified portfolio  (Total Portfolio Solution)  will remain as it’s always been.  That’s not to say it won’t change in the future because it may.  I always stay ahead of the markets and adapt to changes, but as of now there’s no reason to make any changes.

 

25% VTS Tactical Volatility
50% VTS Tactical Balanced
25% VTS Iron Condors

Conservative Vol and Aggressive Vol are just replacement strategies for investors with different levels of risk tolerance.  Since I always recommend people keep their volatility ETP allocations fairly low in their overall net worth, the difference between them will be small enough that there shouldn’t be any stress choosing one.

When you hear the words “Aggressive” and “Conservative” does either resonate with you?  If so, go with that one.  If not, perhaps consider the main VTS Tactical Volatility.

 

Current VTS Total Portfolio Solution Allocations

25% VTS Tactical Volatility Strategy

50% VTS Tactical Balanced Strategy

25% VTS Iron Condor Strategy

VTS Conservative Vol Strategy  –  Optional replacement for lower risk tolerance investors

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