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EJtB vs. Upgrading© Sound Mind Investing | August 2008
Q: I'm comparing SMI's Upgrading strategy with the new Enhanced Just-the-Basics A: The recently reconfigured EJtB strategy is still new enough that we don't have much "real-time" performance data yet, so it's hard to make any definite comparisons to Upgrading. Our back-testing suggests that if the new EJtB strategy had been in place during the 1999-2006 period, it would have returned an average of 12.6% annually, which happens to be exactly the same as Upgrading's gain over that same period. Both approaches performed significantly better than the market's average gain of 4.5% during that span. As for the time required, it would seem EJtB would save a little time, as it only requires attention once per quarter, whereas Upgrading requires attention each month. Costs are likely to be similar, as EJtB will avoid the occasional transaction fees that Upgrading may incur, but also requires an SMI web membership. The bottom line is both seem to be attractive and effective. Given their significant differences, you can choose one or the other, or use each to manage a portion of your overall portfolio. [See Not Sure What the Experts Are Up To, but Here's What I'm Doing in 2008 for more information.] RELATED ARTICLES
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you wrote about in The Latest, Greatest Improvement to SMI's Just-the-Basics Strategy. It seems EJtB's returns are about equal to Upgrading, while EJtB requires less time. Is that correct?
