L.A.A.
Lethargic
Asset Allocation
Mostly buy-and-hold, one slow economic switch
LAA is the odd one out: 75% of the portfolio sits in a fixed permanent sleeve (Russell 1000 Value, gold, intermediate Treasuries — IWD/GLD/IEF, equal-weighted) that never rebalances tactically. Only the remaining 25% rotates between a single risky asset (QQQ) and a single cash asset (SHY).
The rotation gate is Growth-Trend (GT) timing — a macro check rather than asset momentum. Risk-Off only triggers when both signals fire bearishly: SPY below its 200-day SMA AND US unemployment (FRED's UNRATE series) above its 12-month SMA. Either signal alone keeps the rotating sleeve in QQQ. Because both conditions rarely co-occur outside genuine recessions, LAA spends most of its time in 75% permanent + 25% QQQ, and only retreats to cash on broad business-cycle deterioration.
Paper · Growth-Trend Timing and 60-40 Variations: Lethargic Asset Allocation (LAA) — 2019
Backtested results do not predict future returns.
LAA (QQQ↔SHY); site times SPY with a 200-day SMA, the paper with a 10-month SMA, as reported in the source paper (Fig. 12). The fall is measured at month-end — within a month it ran deeper.