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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Investment Strategies / Mechanical Investing
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Author: Paul   😊 😞
Number: of 6132 
Subject: Arezi Ratio
Date: 05/24/25 7:56 AM
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Hello all,
Arezi Ratio has published by Elann for many years.

This week,
90-Day Treasury Bill Yield: Approximately 4.25%
S&P 500 Trailing Earnings Yield: Approximately 3.596%
Arezi Ratio = 1.18

Then he used two allocation formulas.

The 'S=120-50*Arezi Ratio' formula indicates an allocation of 61%
stocks, 39% cash this week.

Other timing indicators:
The S&P index is below its 200DMA. - Bearish
We are in the Nov-Apr part of the year. - Bearish
The trailing PE ratio of the S&P is above 17. - Bearish
The treasury yield curve is inverted. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 31%.

Previous studies are here.( what I know)
aetheling.com: Mechanical Investing
aetheling.com: Notes on the Arezi Ratio

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 64%.

Has anyone done any back testing using these allocation?

Regards,
Paul

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