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Mark Biller

Mark Biller

Executive Editor

Mark joined SMI in 2000. He leads SMI newsletter’s overall content strategy, managing the editorial direction and writing many articles. He led the company’s efforts to create its first web site, helped develop several of SMI’s investment strategies, and has been a contributing author to the Sound Mind Investing Handbook. 

In addition, Mark helped design and launch the three Sound Mind Investing mutual funds. He has served as the Senior Portfolio Manager since the original SMI Fund was launched in 2005. Mark also serves as Senior Portfolio Manager to SMI Advisory Service’s Private Client managed account program.

Mark earned his undergraduate degree in Finance from Oral Roberts University.   

Mark and his wife, Cindy, have three children.

Most Recent Articles

Plugging the Holes in Your Portfolio

There are three primary reasons why investors don't get the returns they expect from their portfolios. I'm not talking about when a person makes poor investing choices out of ignorance, or when a portfolio simply underperforms expectations — those are separate issues. I'm referring specifically to someone who has carefully selected an appropriate portfolio, but then fails to get the returns they expect from that portfolio.

From what I've seen, the three main reasons investors underperform their expectations are the following:

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DAA – New Recommendation for December 2019

There is one change to the DAA lineup for December. Read on for the full details.

DAA is a core portfolio strategy that is designed to help SMI readers share in some of a bull market’s gains, while minimizing (or even preventing) losses during bear markets. The strategy involves using exchange-traded funds to rotate among six asset classes, holding three at any one time.

DAA is a defensive, low-volatility strategy that nonetheless has generated impressive back-tested results when evaluated over full market cycles, demonstrating the power of "winning by not losing."

The recommended categories/ETFs for December are (in order of current momentum):

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DAA Updates Will Be Posted This Weekend

The financial markets are closing early today at 1 p.m. Eastern Time due to the holidays. Holiday-shortened sessions like today's are typically low-volume, which makes it a poor day to trade large quantities of certain ETFs involved in DAA this month.

While Sector Rotation's upcoming changes were clearly defined enough for us to have that write-up done in advance of today's short market session, the same is not true of DAA this month. Deciding those changes, writing them up coherently, and getting them out early enough for SMI members to trade before the early 1 p.m. close isn't practical, even if there weren't concerns about the market's low volume impacting our ability to get good pricing on those transactions.

As a result, we'll be evaluating the final November data after the market closes today and will post the Dynamic Asset Allocation updates for December over the weekend.

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Sector Rotation – New Recommendation for December 2019

There is a new Sector Rotation fund being recommended for December. Read on for the details.

Sector Rotation is a high-risk/high-volatility strategy. While its peaks and valleys have been more extreme than SMI's other strategies, it has generated especially impressive long-term returns, as discussed in Sector Rotation is Risky, But Highly Rewarding.

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Stock Upgrading – New Fund Recommendations for December 2019

Our most aggressive core strategy, Stock Upgrading is a “momentum” strategy premised on the idea that recent past performance tends to persist. The strategy has you diversify your portfolio across five stock fund “risk categories” (along with up to three bond fund categories). You then buy the funds SMI objectively determines to have the highest momentum, occasionally replacing lagging funds with those showing stronger momentum. This article explains the changes to put in place for the coming month.
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Sector Rotation: Short-Term Pain, but Long-Term Gains

If you were to poll SMI members regarding their opinion of our Sector Rotation strategy (SR), you’d likely get two rather distinct answers based on how long the member has been using it. Those who have started using SR within the past 12-15 months would fall into one camp, likely expressing doubts and frustration. Those who have been using SR for several years would likely respond with a different perspective.

Since its debut 16 years ago this month, Sector Rotation has been SMI’s most aggressive — and risky — strategy. As Table 1 shows, SR has produced tremendous returns for SMI members over the past 16 years, despite its recent struggles. Total returns from SR have more than doubled those of the broad market over that time. The back-testing we did on SR all those years ago seemed almost too good to be true at the time, but we now have 16 years of live returns with similarly impressive results.

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Small-Company Stocks Have Been Causing Problems in SMI Strategies

Small-company stocks have historically earned returns at least equal to, if not better than, those of large-company stocks. This “small-company effect” was first quantified in a 1981 study, and while much research on both sides of the issue has since been done, most investing professionals agree that it makes good sense to invest at least a portion of a portfolio in the stocks of smaller companies.

SMI has normally owned equal (or at least similar) allocations of small- and large-company stocks in our Just-the-Basics (JtB) and Fund Upgrading portfolios. This stands in contrast to the market-weighted stock market indexes, such as the S&P 500 and Wilshire 5000, that place greater weight on the shares of larger companies. The net effect, then, is that smaller-company stocks are overweighted in SMI’s portfolios in relation to the market indexes.

While the tendency of small-company stocks to outperform has likely provided a boost to SMI’s overall long-term performance, the year-to-year impact can be uneven. The market can swing from favoring one type to the other, often with little explanation. We can see this in our returns over the past couple of decades.

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An Upgrading Overview: Easy as 1-2-3

Why Upgrade?

SMI offers two primary investing strategies for “basic” members. They are different in philosophy, the amount of attention they require, and the rate of return expected from each. Our preferred investing strategy is called Fund Upgrading, and is based on the idea that if you are willing to regularly monitor your mutual-fund holdings and replace laggards periodically, you can improve your returns. While Upgrading is relatively low-maintenance, it does require you to check your fund holdings each month and replace funds occasionally. If you don’t wish to do this yourself, a professionally managed version of Upgrading is available.

SMI also offers an investing strategy based on index funds called Just-the-Basics (JtB). JtB requires attention only once per year. The returns expected from JtB are lower over time than what we expect (and have received) from Upgrading. JtB makes the most sense for those in 401(k) plans that lack a sufficient number of quality fund options to make successful Upgrading within the plan possible. Here are the funds and percentage allocations we recommend for our Just-the-Basics indexing strategy.

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“Not QE” Has Changed the Market’s Trend

Stocks have posted six straight weeks of higher prices, pushing the S&P 500 Index above its long-term trend-line and breaking through the pattern of the past two years where significant new highs were inevitably met within the next few weeks by a market pull-back or correction.

Importantly, there was a clear catalyst to this change, one with enough of a track record to plausibly suggest it could keep stocks moving higher for a while longer.

To no one's surprise, the Fed is at the center of the shift in market trend.

I'm going to briefly explain what has happened over the past two months, its impact on the financial markets and the current market trend, and what our response should be as SMI investors. Thankfully, the SMI strategies are equipped to handle this. But as we'll see, there are still some issues to consider — especially for investors nearing or already in retirement.

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Trade Deal Update

Clever graphic from Slope of Hope blogger Tim Knight:

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