Each month I’ll publish the latest performance figures, put the most recent month into context, and look at how the strategy is progressing.

The performance updates will remain open to everyone. The current ETF selections, portfolio changes and monthly trading signals are reserved for paid subscribers.

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July 2026 at a Glance

July was another relatively quiet month for the Retirement Portfolio, finishing -1.92% and that left the portfolio +7.59% for 2026 so far. August has started positively too, with the portfolio up +1.22% month-to-date at the time of writing.

One month tells us very little about whether an investment strategy is working though. I include the monthly numbers because I want the performance record to be transparent, but I’m far more interested in what happens over longer periods, and in how much risk was required to achieve those returns. For a retirement portfolio in particular, that second part matters a great deal.

The Bigger Picture

The last 12 months give a much more useful perspective than July on its own and in that respect, over the 12 months to the end of July, the Retirement Portfolio returned +26.8%.

That's a strong result, but return on its own isn't really the number I'm trying to optimise. For someone still accumulating investments, a large market fall can be uncomfortable. But if you are already drawing money from a portfolio, it can be much more serious. Selling investments after a large decline can permanently damage the amount of capital left to participate in the eventual recovery. That’s why I’ve always been particularly interested in the relationship between return and drawdown.

Across the historical backtest and subsequent live period since July 2015, the numbers look like this:

The S&P 500 has been an exceptional investment over this period. In fact, measured in GBP, it has produced a very slightly higher annualised return than the Retirement Portfolio. But it has also experienced a maximum drawdown of almost 26%, compared with approximately 12% for the Retirement Portfolio. That’s the trade-off I’m interested in.

I’m not trying to build a portfolio that beats the stock market every month, and I’m not trying to squeeze out every possible percentage point of return regardless of the journey required to get there. My aim is to capture attractive long-term returns while keeping the inevitable declines at a level I can realistically tolerate while living from the portfolio.

As an example, a 25% fall means £300,000 becoming roughly £225,000 before any withdrawals are taken. A 12% fall would still leave around £264,000. Both are unpleasant, but they represent very different retirement experiences, and that difference becomes particularly important when withdrawals are happening at the same time as markets are falling.

For me, that’s what the Retirement Portfolio is really designed around: not avoiding losses altogether, but trying to avoid the sort of losses that can derail a retirement plan.

Why I Don't Rely on the US Alone

Another thing worth considering is how heavily many ETF strategies depend on the US market. It’s easy to understand why as US equities have produced exceptional returns for a long time, and recently it has often seemed as though owning anything else has simply diluted performance. History is a useful reminder that this hasn’t always been the case.

The chart below, from Charlie Bilello at Creative Planning, shows that the US market has experienced some extraordinarily long periods between new highs. Following the 1929 crash, for example, the S&P 500 price index went roughly 23 years before reaching another record. The period surrounding the dot-com crash and Global Financial Crisis also produced a long stretch in which new highs were extremely scarce.

This isn’t an argument against investing in the US, far from it. The Retirement Portfolio contains plenty of US exposure and will happily hold it when the system favours it. However, I don’t want my retirement to depend on one country continuing to lead indefinitely. That’s one reason the strategy also has access to markets outside the US. If market leadership changes in the future, the system has the opportunity to move with it rather than being structurally tied to yesterday’s winner.

2026 So Far

The individual monthly returns for the Retirement Portfolio have been:

• January: +5.92%

• February: +8.75%

• March: -8.03%

• April: +0.94%

• May: +4.68%

• June: -2.01%

• July: -1.92%

• 2026 YTD: +7.59%

It’s quite a useful sequence. If you had looked at the portfolio at the end of February, the year had started extraordinarily strongly. One month later, much of that gain had disappeared. And despite a fairly unremarkable period since then, the strategy remains comfortably positive for the year. It’s another reminder of why extrapolating from a few weeks or even a few months of performance is rarely useful.

One Month Doesn’t Change the Strategy

I like publishing the monthly figures because they create a genuine record of what happens after a strategy leaves the backtest and starts being followed in real time but I don’t want these updates to become a monthly exercise in judging whether the strategy has suddenly become good or bad. A positive month doesn’t validate it and a negative month doesn’t invalidate it. What matters is how it behaves across different market environments over many years. For me, the questions are much more straightforward:

- Is the strategy continuing to behave broadly as expected?
- Are the drawdowns remaining manageable?
- Are the rules still being followed consistently?
- And is the portfolio continuing to compound over the longer term?

So far, the answer to those questions remains yes!

What Is the Portfolio Holding Now?

This is where I’ve deliberately separated the free and paid parts of the publication. I’ll continue publishing the performance of the Retirement Portfolio openly, so anyone following the publication can see how it is actually doing, but the current holdings, target weights, portfolio changes and month-end trading signals are different. Those are the practical instructions required to actually follow the strategy, so they are reserved for paid subscribers.

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The latest month-end review has already been completed and the August portfolio signal is now available.

That post includes the latest ETF selections, target allocations and any changes required following the July month-end review.

If you’re already a paid subscriber, there’s nothing additional you need to do from this performance update - the actionable information is all in that signal post.

A Note for US Investors

The performance figures in this update relate to the original GBP implementation of the Retirement Portfolio.

US members now have a dedicated USD implementation of the strategy using US-listed ETFs. The underlying framework is the same, but the US version includes an additional trend filter on the attack side, so there may occasionally be differences in holdings between the two implementations.

At the end of July, the US implementation stood at +12.0% for 2026 YTD and +35.6% over the trailing 12 months.

Going forward, each monthly signal post will include a separate US investors section with the relevant US-listed ETFs and target weights.

Why Your Returns May Be Slightly Different

Just a little note here on something a few investors always ask about. Even when two investors are following the same strategy, their realised returns won’t necessarily match mine to the decimal point. There are several perfectly normal reasons for that.

- The exact price obtained when buying or selling an ETF will vary.
- Platforms have different dealing costs and spreads.
- Investors outside the UK may follow a separate implementation using ETFs listed in their home market.
- Currency movements can also affect returns depending on the investor’s home currency.

For that reason, the figures published here should be viewed as the performance record of the Retirement Portfolio model, rather than a promise that every subscriber will reproduce every monthly result exactly. Small implementation differences are unavoidable.

Some of these small positive and negative differences may wash out over time, although they won't necessarily disappear completely. In my robustness testing I have also looked at different ETF implementations, markets and time periods, including a dedicated USD implementation for US investors. The results have remained consistent with the broader objective of the strategy - attractive long-term returns while keeping drawdowns at a level that is more manageable for a retirement portfolio.

Final Thoughts

July wasn’t spectacular. It didn’t need to be. A retirement strategy doesn’t need every month to make money, and it certainly doesn’t need every month to beat the stock market. What matters to me is what happens over the longer term and what I have to endure along the way.

At the end of July, the Retirement Portfolio stands at:

+7.59% in 2026

and

+26.8% over the trailing 12 months.

The historical maximum daily drawdown remains around -12.33%. Those are the numbers I’ll continue watching. The next formal signal will be taken at the end of August, with any required portfolio changes implemented at the start of September.

Until then, there is nothing for me to predict and nothing for me to fiddle with. The rules remain in control. The system is very robust.

Thanks for reading and enjoy your summer!

Performance Notes: performance figures are shown in GBP and represent the Retirement Portfolio model. Historical results prior to the live publication of the strategy include backtested/modelled performance and should not be interpreted as returns achieved by subscribers or as the live track record of an investment fund. Actual investor returns may differ because of ETF selection, execution prices, bid/offer spreads, platform fees, taxes and currency movements.

Disclaimer: The Retirement Portfolio is published for educational and informational purposes only. Nothing published here constitutes personal financial advice or a recommendation to buy or sell any security. Investing involves risk. The value of investments can fall as well as rise and you may get back less than you invest. Historical, simulated and backtested performance is not a reliable indicator of future performance. There is no guarantee that the Retirement Portfolio will reproduce its historical results in the future. The information published here does not take into account your personal financial circumstances, investment objectives or tolerance for risk. Any investment decisions you make remain your own responsibility. Where appropriate, you should seek advice from a suitably qualified financial adviser.

Looking for more than money

A little background first: throughout my career I worked in various technical roles for a number of big blue chip firms, and the work covered big data analysis, econometrics, statistical modelling, and coding projects that more often than not, involved separating signal from noise in various messy datasets. It was the kind of work where you learn quickly that what looks like a pattern often isn’t, and that the most dangerous conclusions are the ones that feel most obvious.

Alongside all of that, I had a separate goal. Financial independence. Not because I wanted luxury or to spend my days doing nothing (although that does sound tempting!), but because I wanted control over my own time. I wanted to walk my dog without constantly checking my phone, cook good meals properly, work-out without rushing, travel when I wanted to rather than when I was allowed to, and so on. That was the real objective, and investing seemed like the obvious route to it.

Learning to pick good companies

After the magazines my early education came through quality investing and fundamental analysis, and I spent a lot of time absorbing Phil Oakley and Simon Thompson's work in Investors' Chronicle and their books, learning about company valuations, what makes a genuinely good business, and how to read accounts properly. I remember the quiet excitement when “ST’s” column dropped - scanning it quickly, wondering whether the opportunity was still there before everyone else piled in. Yep, I was still “retail”!

Looking back, that period taught me a great deal. But it also planted a question I couldn’t quite shake.

If thousands of people were reading the same column at the same time, where exactly was the edge I thought I possessed?

Searching for a better process

That question attracted me towards more technical approaches. So I then joined a private investing community, and got involved with a professional technical investing website run by a well-known and respected UK investor. I spent years learning trend following, technical analysis and risk management properly rather than casually. By this point I could say I felt like a “professional” not “retail”. I was trading in a very different way: risk management first, and looking for certain key set-ups where technicals and fundamentals aligned. I started to do consistently well, performing ahead of the funds and most private investors. I could flick through hundreds of charts and find the ones that mattered right away.

It was genuinely valuable. I stopped thinking that investing was simply about finding the next winning share. Risk management started to matter as much as returns - maybe more. Some of my stock picks had gone badly, but the losses were always small and controlled, whereas winners were allowed to run or even topped-up and dominated the P&L. That discipline stuck with me.

There was still a slight issue though. These approaches demanded consistent attention and lots of time: charts to review, reports to read, judgement calls every day and week. When life got busy, and life always gets busy, it became harder to execute the process properly. There were also large stretches of time when the system was essentially “off” and not “in play”. That was when a different question started to nag at me.

Could I honestly keep this up for the next thirty years? When would I stop?

The moment things shifted

The real shift started when I watched a few Stockopedia presentations. I still think it’s one of the best resources available to private investors in the UK or US - its screening tools and ranking system showed me the power of systematic thinking more clearly than anything I’d encountered before. But what stopped me in my tracks wasn’t the tools themselves. It was the backtests.

I kept seeing systematic stock strategies that had delivered long-term CAGRs of between 15 to 22%. These were systems where a few stocks were selected based on their techno-fundamental scoring system and then essentially left for a whole year. I wasn’t looking at lucky years. I was looking at what a well-designed system could do when you let it run. However, there were still issues as these systems had drawdowns of more than 40% plus which could ruin you unless you could hold on psychologically and then what if you needed the money at that time or just how long would that drawdown go on for? Essentially the headline CAGRs were attention grabbing, but adjusted for risk (see my post below on drawdown and the Calmar ratio), they didn’t hold up, and when they tried to add stops the CAGR collapsed.

Around the same time I discovered the work of Gary Antonacci, Meb Faber and others writing seriously about systematic investing. For the first time, my professional background and my investing interests started to converge. Years spent building econometric models and testing statistical hypotheses suddenly felt directly relevant. I knew how to interrogate a backtest. I knew what data-mining looked like. I knew the questions to ask before trusting a result.

My professional instincts took over. I stopped looking for winning companies and started looking for a winning process.

Building something I could trust

The process I eventually built didn’t arrive quickly. It took months of research, coding, testing and refinement. Every assumption got challenged. I compared approaches, tested parameters, used out-of-sample data and walk-forward analysis, and kept asking myself one question throughout:

Is this genuinely robust, or does it just look good in hindsight?

The major shift was also moving to ETFs, no more reading stock reports daily, far less churn, lower trading costs, more liquid and less prone to large volatile swings. Much safer and easier to sleep at night! Niche ETFs were not required, vanilla ones with long histories were what was needed.

That instinct, to try to disprove it before you trust it, came directly from my working life. It’s also why I still revisit the process I have built annually now. Not because I’m chasing something new, but because I think any serious investment process should be able to stand up to fresh scrutiny. Markets change. Assumptions that were reasonable ten years ago aren’t always reasonable now.

And so drawdown control became just as important to me as returns, more so, actually, once I started thinking seriously about sequence risk and what it means to draw income from a portfolio rather than simply grow it. A system that produces 20% a year but occasionally drops 40% is a very different proposition for a retiree than it is for a thirty-year-old with decades of contributions ahead of them.

Where things stand now

I still enjoy reading financial research and following markets. But I no longer feel the need to react to every headline or every company report. The system does the work. That doesn’t mean uncertainty disappears, it never does, and anyone who tells you otherwise is selling something. What I found instead was something more useful than certainty: a process I believe I can follow consistently, through bull markets and bear markets and all the dull months in between, while getting on with the rest of my life.

Walking the dog. Cooking something decent. Getting to the gym. Going somewhere new when the mood takes me. That was always the real objective. The investing was just the means to get there.

A few years ago I read Robert Wringham’s The Good Life for Wage Slaves. Although it isn’t an investing book, it put into words something I’d been moving towards for years. The purpose of investing wasn’t simply to accumulate more money. It was to create the freedom to spend more time on the things that actually matter - family, friends, health, learning, travel and the simple pleasures of everyday life.

The point wasn’t simply to build wealth. The point was to build a life in which wealth no longer dominated my thoughts - “the good life”.

For me, that was the real objective all along.

If you enjoyed reading this, and want to learn more about the Retirement Portfolio, a simple ETF system that takes 10 minutes a month to run and delivers 15%+ CAGR with a maximum daily drawdown of -12.3% then sign up below, thanks.

The Retirement Portfolio in a snapshot

How to read the figures

CAGR = Compound annual growth rate: the annualised rate at which the portfolio grew over the period.
Max DD = Maximum drawdown: the largest peak-to-trough fall experienced during the period, based on daily data.
Sharpe = A measure of return relative to volatility. Higher is generally better.
Calmar = CAGR divided by maximum drawdown. It measures the return achieved relative to the worst historical fall. Higher is better: a strong Calmar suggests the portfolio has generated attractive returns without exposing investors to equally large drawdowns.
Volatility = How much the portfolio’s returns fluctuate over time.
YTD = Year to date: the return from the beginning of the current calendar year.

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Read more

The heatmaps in this report show every completed month in the frozen UK All Retirement Portfolio backtest, from July 2015 to June 2026. Green cells are gains. Red cells are losses. The numbers are the actual monthly returns generated by the production backtest, with no smoothing and no retrospective changes to the strategy.

The monthly record

Across 131 completed months, the portfolio recorded 88 gains and 43 losses. That is a monthly win rate of 67.2%. The best month was June 2016, when the portfolio gained 11.84%. The worst was March 2026, when it lost 8.03%.

Those figures are a useful antidote to the idea that a successful system should win almost all the time. It should not. A robust portfolio is paid for accepting uncertainty, and uncertainty arrives one month at a time. Losing months are not necessarily signs that the process has stopped working. They are part of the distribution that produces the long-run result.

The asymmetry matters more than the raw count. A strategy can be right less often than expected and still compound well if it participates in sustained advances while containing the damage in adverse regimes. Over this test, the portfolio compounded at 15.29% a year with annualised volatility of 10.09%. Its deepest monthly drawdown was -8.12%, measured at month-end closes.

Why not simply buy SPY?

The answer is not higher returns in every month. Over this backtest, RP and SPY produced similar annualised returns in pounds: 15.29% versus 15.6%. But RP’s maximum monthly drawdown was 8.12%, compared with 14.7% for SPY. Its Calmar ratio was 1.88, compared with 0.60 for SPY — more than three times higher. Historically, the portfolio surrendered some upside during strong equity months in exchange for materially shallower losses when markets became hostile. For an investor withdrawing from a portfolio, that difference in the path can matter as much as the final return.

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The second heatmap shows SPY converted into pounds, so the comparison reflects the experience of a UK investor holding an unhedged US equity fund. The third subtracts SPY’s monthly return from the portfolio’s return. Green in that relative map does not necessarily mean the portfolio made money; it means it did better than SPY that month. Red means it lagged.

Over the 131 directly comparable months, the Retirement Portfolio outperformed SPY in 59, or 45.0%. This is not meant to prove that one should beat the other every month. Their jobs are different. SPY is a concentrated claim on large US companies, with sterling currency exposure layered on top. The Retirement Portfolio rotates across attack and defensive assets and is explicitly designed around drawdown control.

That difference becomes most valuable when the equity market’s return distribution turns hostile. In strong, persistent US bull markets, diversification can look unnecessary. During shocks and reversals, the ability to hold assets with different economic sensitivities becomes visible. The relative-return heatmap makes both sides honest: protection has value, and so does the opportunity cost paid when SPY races ahead.

Twelve months changes the picture

Individual months contain a great deal of noise. The rolling 12-month chart asks a better behavioural question: what return would an investor have seen over the preceding year at each point in the test?

The strongest 12-month stretch ended in February 2026 at 43.31%. The weakest ended in May 2023 at -2.69%. These rolling figures overlap, so they are not independent observations, but they reveal whether results came from one isolated burst or from repeated compounding across different environments.

The annual chart provides a second view. Calendar years are arbitrary cut-offs, yet they are how most investors review statements and judge themselves. There were no negative calendar years in the available record. A positive long-run CAGR never promises a positive return in each calendar year—or even in every rolling year.

What the losing periods actually looked like

The table ranks the weakest one-, three- and 12-month outcomes. The single worst three-month stretch ended in December 2018, with a return of -7.45%. The drawdown table tracks each underwater episode from the prior peak through the trough and eventual recovery.

This distinction matters. A bad calendar month is a fixed slice of time. A drawdown is an investor experience. It begins when capital falls below its previous high and ends only when that high is recovered. Several modest negative months can therefore create a longer psychological burden than one sharp fall followed by a quick rebound.

The current episode is correctly marked as ongoing. The portfolio’s previous daily equity peak was 27 February 2026 and its worst point in this episode was 11.90% below that peak on 26 March. By the end of June 2026 it remained approximately 5.46% below the peak, but had not yet established a new high. The -11.90% shown in the table is therefore the episode’s maximum depth so far, not its current drawdown.

Drawdown control is not the same as drawdown elimination. The portfolio’s Calmar ratio was 1.24, calculated as CAGR divided by the magnitude of the maximum daily drawdown. That number summarises an attractive historical trade-off, but it does not place a ceiling under future losses. Markets can always produce a regime absent from a backtest.

How to read this report

I would not use the heatmap to hunt for seasonal rules, nor treat a particular month as inherently favourable or dangerous. With a little more than a decade of data, each calendar month has only a small sample. Apparent patterns can easily be coincidence.

The more defensible lessons are behavioural. First, winning systems still lose regularly. Second, the path of relative performance can be uncomfortable even when the long-run result is good. Third, looking at daily drawdowns alongside monthly returns prevents a month-end report from understating the worst experience. Finally, a systematic investor needs to decide in advance which evidence would justify changing a model. Disappointment over a few red cells is not enough.

This is why I publish every winning and losing month. A polished equity curve can encourage false confidence. The complete return grid shows the bargain more clearly: irregular gains, unavoidable setbacks, periods of lagging the obvious benchmark, and the possibility of strong compounding when the rules are followed consistently.

There is also a practical reason to keep this record. Memory is selective. After a strong run, earlier losses tend to look smaller and more obviously temporary than they felt at the time. During a setback, previous recoveries can seem irrelevant. A fixed monthly record prevents both distortions. It gives the investor a contemporaneous baseline against which to judge whether present results remain within the broad historical character of the system—without pretending that history defines every possible future outcome.

Backtested results are hypothetical, exclude personal tax circumstances and are not a guarantee of future performance. This article is for information only and is not financial advice.

A few people have asked me to publish the exact ETFs I use in the portfolio. I understand the request, a strategy is not much use if nobody can work out how to implement it. The difficulty is deciding how much to give away. The funds themselves are not secret and I am not using anything exotic. The portfolio is built from ordinary vanilla ETFs covering equities, bonds, gold, commodities and cash, but the exact list is still part of the secret sauce!

I have spent a lot of time deciding which markets belong in the system, which funds are suitable, how to deal with short ETF histories and which alternatives are close enough when the preferred fund is not available. That last point matters because this is not really a UK-only strategy. I run it from the UK, so naturally I use funds available through UK platforms but someone in the US could run the same system using US-listed ETFs, someone in Europe could also run it using suitable UCITS ETFs available to them. They do not have to use exactly the same ticker, but I do provide the best alternative ticker for a US implementation if available. The important thing though is that the fund performs broadly the same role within the portfolio. This matters for investors using restricted accounts too. Some US 401(k) plans, for example, offer only a limited menu of funds. In those cases, the important thing is not matching my ticker exactly, but identifying the closest available fund that provides the required underlying exposure.

Paid subscribers will still receive the relevant UK and US ETF tickers with the monthly signals. The point is simply that investors using other markets, brokers or restricted accounts may need to identify the closest equivalent available to them. A US ticker may be unavailable to a British investor. A European ETF may have one ticker in London, another in Frankfurt and another in Amsterdam. Sometimes the ticker changes while the fund and ISIN remain the same. There can also be several funds that appear to cover the same market but are not quite identical. One may include emerging markets. Another may not. One bond ETF may own short-dated government debt. Another may have much more sensitivity to interest rates. Two commodity funds may follow different indices and produce noticeably different returns. Most investors do not need to obsess over every small difference. I certainly do not believe in endlessly changing funds to save another 0.02% in fees. But the fund does need to do the job it was selected to do.

What is in the portfolio?

At a broad level, the system looks across:

• Major equity markets

• Regional equities

• Smaller companies

• A small amount of long history themed ETFs

• Government bonds

• Gold

• Broad commodities

• Cash

The equity assets are there to drive returns; the defensive assets are there because equities are not always the best place to be, and bonds are not guaranteed to protect you in every difficult market. That was particularly obvious in 2022, when shares and bonds both fell together.

Gold, commodities and cash each behave differently. None is a perfect hedge, but together they give the system more than one possible response when the market environment turns against equities.

The portfolio does not hold everything at once. The system decides which assets qualify and which are currently strongest. These are not fixed portfolio weights. The exposures held at any particular time are determined by the system’s monthly signals, so the relevant asset classes — and their allocations — can change from one month to the next.

That decision-making process is far more important than the ticker symbols themselves.

What I publish

For paid subscribers, I provide the ETFs needed to implement the portfolio in both the UK and US.

The important thing is the underlying exposure rather than matching a particular ticker. Different countries, brokers and retirement accounts may offer different funds, and in some cases the exact ETF I use may simply not be available. Where that happens, the aim should be to find the closest suitable fund providing the same underlying exposure.

What I am unlikely to publish is the full production list together with every substitute, proxy and selection rule. That would come close to publishing the working system rather than simply explaining how to implement it. There has to be a reasonable line between transparency and giving away the entire methodology.

The watchlist is only one part

It is worth saying that even the complete ETF list would not tell somebody how to reproduce the portfolio.

They would still need to know:

• Which assets are compared with each other

• How they are ranked

• When the portfolio moves into defence

• How the defensive assets are selected

• When cash is used

• When the portfolio rebalances

A list of ingredients is not the same as the recipe. I want readers to understand what the portfolio is doing and why. I do not want it to feel mysterious or impossible to implement. At the same time, I do not think it makes sense to publish every detail of several years of research in one free post.

Paid subscribers receive the information needed to follow the live portfolio, including the current allocation and the UK and US implementation. I will also explain any changes that affect how the portfolio is implemented. The underlying selection rules and full research process remain proprietary.

The Retirement Portfolio is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Markets are noisy.

The numbers usually aren’t.

Welcome to the first edition of By the Numbers - a weekly collection of statistics that challenge conventional investing wisdom, highlight important market history, and occasionally reveal what I’ve learned from testing my own retirement strategy.

No predictions. No sensational headlines. Just numbers worth thinking about.

50%

A portfolio that falls 50% needs to gain 100% just to get back to where it started.

Why it matters: Avoiding deep losses can matter more than chasing the highest returns.

Source: Basic investment mathematics.

4%

The famous “4% rule” was based on historical US market data - not a guarantee, and not a rule designed around modern systematic strategies.

Why it matters: Withdrawal rates should depend on your portfolio and flexibility, not one historical study.

Source: William Bengen (1994).

-57%

The S&P 500 lost approximately 57% during the Global Financial Crisis.

Why it matters: Most investors only discover their true risk tolerance during a bear market. This is why you need to learn what the max daily drawdown of your system is; can you tolerate that? Another good exercise (spoiler future post!) is looking at how your system would have coped in the Global Financial Crisis 2007-2009. Have you tested it?

Source: S&P Dow Jones Indices.

131

My retirement strategy has made 131 monthly decisions over the last 11 years.

Why it matters: Successful investing doesn’t require watching markets every day. You don’t need to be obsessed to do well; just a follow a simple process and apply it for the long term.

Source: My backtests (June 2015–June 2026).

3

My strategy only ever owns three ETFs at any one time.

Why it matters: Simplicity reduces mistakes and makes a portfolio easier to stick with.

Source: The Retirement Portfolio methodology.

67.2%

67.2% of months in my backtest finished with a positive return.

Why it matters: No strategy wins every month, but consistency makes investing psychologically easier.

Source: My backtests.

10 minutes

Around 10 minutes each month is enough to check the signal and rebalance.

Why it matters: The less time you spend reacting to markets, the less likely you are to make emotional decisions.

Source: The Retirement Portfolio methodology.

25

A 25% loss still requires a 33% gain just to break even.

Why it matters: Small reductions in drawdown have a surprisingly large impact on long-term wealth.

Source: Basic investment mathematics.

80%

Research has shown that many professional fund managers fail to beat their benchmark over long periods after fees.

Why it matters: Cost, discipline and process often matter more than stock-picking skill.

Source: S&P SPIVA Scorecards.

20

Since 1928, the S&P 500 has suffered a bear market (a decline of at least 20%) around 20 times.

Why it matters: Bear markets aren’t rare. They’re a normal part of investing, which is why having a plan before they arrive is so important.

Source: Hartford Funds / CFRA.

Final thought

Every week we’re bombarded with headlines, predictions and opinions.

The numbers usually tell a much clearer story.

See you soon for another edition of By the Numbers.

That is a solid result, particularly because the first half of the year has not been a smooth one.

The portfolio made strong gains during January and February, before giving some of those gains back during the spring. Markets became more unsettled, leadership shifted, and several previously strong assets weakened at the same time.

Despite that, the portfolio remains comfortably positive for the year.

2026 so far

The year began strongly.

January and February produced the majority of the gains, while March and June were more difficult. The portfolio then stabilised as the balance between its growth and defensive holdings changed.

That pattern is worth highlighting because the portfolio has not simply risen in a straight line.

The year-to-date return has included:

• strong positive months;

• several meaningful setbacks;

• changes in market leadership;

• periods when growth and defensive assets moved against the portfolio at the same time.

The result has therefore been earned through a fairly demanding market environment rather than one uninterrupted rally.

What has driven performance?

The portfolio’s growth allocation benefited from continued strength in some of the largest equity markets and technology-related assets.

At the same time, the defensive side of the portfolio has had a more mixed year.

Gold performed very strongly earlier in the period but later weakened sharply. Government bonds and index-linked bonds also struggled to provide consistent protection.

Broad commodities have been one of the stronger defensive areas more recently.

This is precisely why the portfolio does not rely on a single permanent defensive asset. Different assets respond to different economic conditions, and the strongest defensive market can change over time.

The drawdown has still been uncomfortable

Although the portfolio remains positive for the year, it has experienced a noticeable drawdown from its February peak.

That is an important reminder that a positive year-to-date return does not mean the journey has been easy.

An investor looking only at the starting value and the current value would miss much of what happened in between.

The portfolio rose strongly, declined, partially recovered and then experienced further weakness.

That kind of path is normal. The aim of the strategy is not to eliminate every setback, but to prevent a manageable decline from developing into something much more damaging.

How the result compares

A return of approximately 9% in just over half a year is ahead of the portfolio’s long-term target.

It should not be treated as a normal expected six-month return, and it should certainly not be projected forward.

Some periods will be much weaker. There will also be years when the portfolio trails a fully invested equity portfolio.

The relevant point is that the portfolio has continued to make progress while operating within a significantly more controlled risk framework than an all-equity approach.

What I am watching next

The second half of the year begins with a very different market mix from the one seen in January.

Equity leadership remains relatively concentrated, bond markets remain uncertain, and defensive assets are no longer moving together.

The portfolio will continue to respond monthly rather than trying to forecast what happens next.

The main things I will be watching are:

• whether equity strength broadens or narrows further;

• whether commodities retain their momentum;

• whether gold stabilises after its recent weakness;

• whether bonds begin to offer meaningful defensive strength again;

• whether the current drawdown starts to recover.

None of these require a discretionary prediction. They simply determine which assets continue to rank most strongly within the system.

Final thought

The portfolio is up approximately 9% so far in 2026, but the more useful lesson is how unevenly that return has arrived.

There have already been strong gains, reversals and periods of uncomfortable weakness.

That is exactly why a rules-based process matters.

The objective is not to produce a perfect line upwards. It is to keep making progress while controlling the damage when conditions change.

So far, 2026 has been a good test of that principle. For monthly trade signals, join by clicking below.

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Past performance does not guarantee future results. Figures are based on a backtested model and are provided for information only.

Same Return. Different Retirement.

Two portfolios.

Both start with £1,000,000

Both earn 8% average annual returns

One ends retirement with substantially more wealth.

The other begins to lose his money.

In retirement, the order of returns can matter just as much as the returns themselves.

Introduction

Ask someone what determines a successful retirement and they’ll usually give the same answer:

“You need good investment returns.”

That certainly helps.

But surprisingly, it isn’t the whole story.

For retirees, the order in which those returns occur can be just as important as the returns themselves.

This is known as sequence-of-returns risk, and it is one of the most misunderstood risks in investing.

In fact, two retirees can experience exactly the same average annual return over twenty years...

...yet one enjoys a comfortable retirement while the other watches their portfolio slowly disappear.

Let’s see why.

Meet Two Retirees

Imagine two investors.

Both retire today with a portfolio worth £1,000,000.

Both withdraw £40,000 per year, increasing that amount with inflation.

Over the next twenty years, both achieve exactly the same average investment return.

On paper, they’ve had identical investments.

Yet one finishes retirement with substantially more money than the other.

How can that be?

Exactly the same average return.

Very different retirement outcome.

Why Does This Matter?

When you’re still working, market crashes are unpleasant...

...but they aren’t necessarily disastrous.

You’re still earning a salary.

You’re still buying investments.

Lower prices may actually benefit you.

Retirement changes everything.

Now your portfolio is funding your lifestyle.

Instead of buying investments after market falls...

...you’re selling them.

That means fewer shares remain invested when markets eventually recover.

This creates a permanent drag on future wealth.

Year after year.

The Snowball Effect

Imagine withdrawing £40,000 from a portfolio that’s just fallen 30%.

You’re forced to sell significantly more investments than you would have done only a year earlier.

Those investments can never participate in the recovery.

That damage compounds.

This is why retirees often fear bear markets much more than younger investors.

Selling investments after large market falls permanently reduces the capital available for the recovery.

Sequence Risk Isn’t About Average Returns

This is perhaps the most surprising part.

If you looked only at the average return...

Both retirees appear identical.

Average return tells you nothing about when gains and losses occurred.

Retirement investing is one of the few situations where timing genuinely matters.

Not market timing.

Return sequencing.

That’s a completely different concept.

What Can Investors Do?

Unfortunately, sequence risk can never be eliminated completely.

Markets will always fluctuate.

Bear markets will always happen.

But investors can reduce its impact.

Examples include:

• Maintaining cash reserves.
  

• Flexible withdrawal strategies.
  

• Holding diversified portfolios.
  

• Avoiding unnecessary panic selling.
  

• Managing portfolio drawdowns.
  

Each approach attempts to solve the same underlying problem:

Avoid selling large amounts of investments immediately after severe market declines.

Why Drawdowns Matter So Much

This is one reason why I place so much emphasis on drawdowns.

Many investors judge a strategy almost entirely by its annualised return.

I don’t.

I care just as much about how painful the journey is. Hence my obsession with things like the Calmar ratio.

A portfolio that loses 12% feels very different from one that loses 30%.

Not just emotionally...

Financially as well.

Smaller drawdowns mean less capital has been destroyed.

Less capital needs recovering.

Less pressure from withdrawals.

Greater confidence to stay invested.

The deeper the drawdown, the harder the recovery.

This Is Why I Built The Retirement Portfolio

When I retired, I realised my priorities had changed.

I no longer needed the most aggressive portfolio possible.

I needed one that could continue growing while reducing the impact of major market declines.

That doesn’t mean avoiding equities altogether.

Nor does it mean trying to predict the future.

Instead, The Retirement Portfolio uses a systematic process that seeks to participate in rising markets while adapting when market conditions deteriorate.

No investment strategy removes risk.

No investment strategy avoids every loss.

But reducing the depth of major drawdowns may improve both the financial and psychological experience of investing through retirement.

Final Thoughts

Most investment discussions begin with one question:

“What’s the expected return?”

For retirees, a better question may be:

“What happens if the first few years are terrible?”

That’s the question sequence-of-returns risk asks.

And it’s one of the main reasons The Retirement Portfolio focuses not only on growing wealth...

...but on helping investors preserve it when it matters most.

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Why I Built The Retirement Portfolio

After retiring in my early forties, my priorities changed. I no longer needed to maximise returns at all costs. I needed a portfolio that could continue growing while limiting the deep drawdowns that make retirement investing so difficult.

Traditional passive investing works well for many people, but retirement introduces a different challenge. Large losses early in retirement can permanently damage a portfolio through sequence risk.

I couldn’t find an ETF strategy that prioritised drawdown control without sacrificing long-term growth, so I built one myself.

What Makes It Different?

🛡️ Drawdown-first: Protects capital.

📈 Growth-focused: Participates and captures rising markets.

🔄 Always invested: Holds an adjusting basket of growth and defensive ETFs instead of trying to predict the future.

How The Strategy Works

The strategy combines a small number of low-cost ETFs representing global growth assets and defensive assets.

Each month it evaluates the strength of market trends using objective rules. When markets are healthy, it favours growth ETFs. When conditions deteriorate, it gradually rotates towards defensive assets such as government bonds, gold, commodities or cash equivalents.

There are no forecasts, opinions or discretionary decisions. Every monthly allocation follows exactly the same systematic process.

The ETF universe is deliberately conservative. It consists of large, highly liquid, low-cost ETFs with long trading histories. I deliberately avoid fashionable niche ETFs or newly launched products that lack sufficient evidence across multiple market cycles. I will often only start to look at an ETF once it has 10 years history.

Although the strategy is intentionally simple to follow, a great deal of research sits behind the scenes. The monthly signal is the end result of years of testing, refinement and validation, covering areas such as asset selection, momentum measurement, defensive asset rotation, portfolio construction, execution timing, robustness testing and risk management.

Paid subscribers see the final allocation each month. The complexity is in designing a process that remains robust across different market environments, not in making the implementation complicated.

Performance

The beauty of the retirement portfolio is as follows:

• Good market rate returns of 15-16%, matching global indices like the S&P 500.

• Low drawdowns - a maximum daily historical drawdown of -12.33% (that’s not in a single day, that is the biggest drawdown using daily data; other people may try sell you a system that uses monthly data, don’t fall for that!) The S&P went down -26% in the same period.

• Best year +26.5%, worst +0.7% - yes, no negative years so far!

• Very strong calmar ratio - this is the CAGR / max daily drawdown - a higher ratio is better, indicating greater returns for every unit of downside risk taken. It’s a phenomenal measure and tells you how a system actually feels to trade; so work it out yourself when you are comparing different systems out there.

  

One important point: as mentioned above, the drawdowns shown here are calculated using daily portfolio values, not monthly observations.

Monthly drawdowns can significantly underestimate the true risk experienced by investors during fast-moving market declines. Whenever you compare investment strategies, make sure you understand how the maximum drawdown has been measured.

Why I Compare Against a Traditional 60/40 Portfolio

Many investment strategies compare themselves only against a global stock market index. While that may be appropriate for younger investors accumulating wealth, I don’t believe it reflects the reality faced by most retirees.

A retiree’s objective is different.

The goal is not simply to maximise returns. It is to generate long-term growth while avoiding the large portfolio declines that can permanently damage retirement income through sequence risk.

For that reason, I compare The Retirement Portfolio against two benchmarks:

• A traditional 60/40 portfolio, representing a balanced retirement allocation.

• A global equity portfolio, representing a conventional long-term growth investment.

This provides a fair comparison across different investing styles and helps demonstrate the trade-offs between return and risk.

Who This Is For

The Retirement Portfolio is designed primarily for investors who value capital preservation alongside long-term growth.

It may be particularly suitable for:

• Retirees drawing an income from their investments.

• Investors approaching retirement who wish to reduce portfolio risk.

• Financially independent investors seeking a more resilient investment approach.

• ETF investors who prefer systematic investing over stock picking.

• Investors who appreciate a simple monthly process requiring only a small amount of time each month.

• Investors who have realised that preserving wealth is often more important than chasing every last percentage point of return.

Who This Probably Isn’t For

This publication is unlikely to be suitable if your priority is maximising returns regardless of volatility.

It is probably not for:

• Day traders.

• Short-term market speculators.

• Individual stock pickers.

• Investors seeking high-risk, high-reward opportunities.

• Anyone expecting guaranteed or uninterrupted outperformance.

Every investment strategy involves periods of disappointment.

My objective is not to eliminate those periods, but to reduce their severity while maintaining attractive long-term returns.

What Subscribers Receive

Subscribers receive a concise monthly update containing everything needed to follow the strategy.

This includes:

• The current ETF allocation.

• Any portfolio changes for the month ahead.

• Commentary explaining the allocation.

• Updated performance statistics and charts.

• Ongoing research and improvements to the strategy where appropriate.

The strategy is deliberately straightforward.

If you have a standard brokerage account and can spare around fifteen minutes each month, you can implement the portfolio without needing to follow financial news or make discretionary investment decisions.

A Final Thought

After many years researching investment strategies, one lesson stands out above all others.

Successful investing is rarely about finding the highest possible return.

It is about building a portfolio you can remain committed to through every market cycle.

For retirees especially, avoiding unnecessary losses can be every bit as important as capturing gains.

That is the philosophy behind The Retirement Portfolio.

It is a systematic, evidence-based approach designed to help investors pursue long-term growth while placing capital preservation at the heart of the investment process.

If your priority is simply maximising returns, there are probably better newsletters to follow.

But if your goal is to build wealth while reducing the emotional and financial impact of large market declines, I believe you’ll find something valuable here.

I hope you’ll join me.

Subscribe below to receive the monthly portfolio updates and follow the strategy as it evolves.

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This article explains the philosophy behind The Retirement Portfolio and why I believe protecting capital matters more than chasing maximum returns.

Imagine you’ve spent forty years building a retirement portfolio worth £1 million.

You finally retire.

No more salary.

No more monthly contributions.

Your portfolio now has one job:

Fund the rest of your life.

Then the market falls 30%.

You don’t just lose £300,000 on paper.

You lose confidence.

You reduce spending.

You delay holidays.

You question your plan.

And if you’re withdrawing money at the same time, the damage can become permanent.

This publication exists because I believe most investors are solving the wrong problem.

Why I’m Writing This

Before explaining the strategy, I think it’s only fair to explain where it came from.

My background is in econometric modelling and data science, where I spent years analysing data, building models and making decisions based on evidence rather than opinion.

Investing became a natural extension of that mindset.

Like many investors, I began with a simple objective: build as much wealth as possible.

But as my own portfolio grew, and as I stepped away from full-time work, my thinking changed.

The question was no longer:

“How do I maximise returns?”

Instead it became:

“How do I protect what I’ve already built without giving up the opportunity for long-term growth?”

That question sent me down a rabbit hole of academic research into momentum investing, tactical asset allocation, portfolio construction, diversification, drawdowns and behavioural finance.

Over several years I built, tested and refined what eventually became The Retirement Portfolio.

Initially it was never intended to become a publication.

It was simply the framework I wanted to trust with my own money.

Over time I realised something.

There are thousands of websites teaching people how to become wealthy.

There are surprisingly few dedicated to helping people stay wealthy once they’ve achieved financial independence.

That’s why this publication exists.

The Problem

Spend five minutes reading investment news and you’ll quickly notice that almost every conversation revolves around one thing: returns.

Which fund returned the most last year?

Which ETF beat the S&P 500?

Which strategy delivered the highest CAGR over the last decade?

It’s understandable. Higher returns are exciting, easy to compare, and make for compelling headlines.

But if you’re retired—or planning to retire soon—I believe those are the wrong questions.

Retirement changes the rules.

When you’re building wealth, market declines can actually work in your favour. You’re still earning a salary, you’re regularly investing new money, and falling prices simply allow you to buy more shares at lower valuations.

Retirement is different.

Your salary has stopped.

Instead of adding money to your portfolio each month, you’re likely withdrawing from it to fund your lifestyle. That completely changes the mathematics of investing.

A large market decline early in retirement isn’t just uncomfortable—it can permanently reduce the sustainability of your portfolio. This is known as sequence-of-returns risk, and it is one of the most important yet least appreciated risks retirees face.

Two investors can achieve exactly the same average annual return over thirty years, yet experience dramatically different outcomes depending on when those returns occur. Suffering a major drawdown while simultaneously making withdrawals can leave a portfolio with far less capital available to participate in the eventual recovery.

Even if markets recover, your portfolio may never fully catch up.

Then there’s the human side of investing.

Most investors believe they can tolerate a 30% or 40% decline.

Very few actually can.

It’s one thing to see a drawdown on a backtest. It’s something entirely different when hundreds of thousands of pounds have disappeared from your own retirement savings, the financial news is predicting further declines, and you’re wondering whether your retirement plan is beginning to unravel.

This is where behaviour often becomes more important than mathematics.

Investors panic.

They sell.

They wait for “things to calm down.”

And, more often than not, they buy back after much of the recovery has already happened.

The result isn’t simply a temporary loss—it becomes a permanent reduction in long-term wealth.

That’s why I don’t believe the best retirement portfolio is necessarily the one with the highest historical return.

I believe it’s the portfolio that gives you the greatest chance of staying invested through difficult markets.

Because compounding only works if you’re still there to experience it.

A Different Way of Thinking About Retirement Investing

The Retirement Portfolio was built around a simple idea:

What if the objective isn’t to maximise returns, but to maximise the probability of reaching the end of retirement with both your wealth and your peace of mind intact?

That may sound like a subtle difference, but it changes almost every investment decision.

Rather than asking:

“Which portfolio produced the highest historical CAGR?”

I prefer to ask:

“Which portfolio gives me the highest probability of staying invested when markets become difficult?”

Those aren’t necessarily the same thing.

A strategy that produces exceptional long-term returns but regularly experiences 40–50% drawdowns may look wonderful on a spreadsheet.

Living through those declines with your own retirement savings is a completely different experience.

For many investors, the greatest investment risk isn’t choosing the wrong ETF.

It’s abandoning a perfectly sensible strategy at exactly the wrong moment.

That’s why The Retirement Portfolio places drawdown management at the centre of the investment process.

The goal isn’t to eliminate losses.

No strategy can do that.

The goal is to reduce them enough that investors are more likely to remain disciplined, stay invested and allow compounding to continue working over many years.

Evidence Before Opinions

I’m naturally sceptical of investment claims.

Every year another strategy promises market-beating returns with little risk.

Most disappear after a few years.

That’s why I believe investment strategies should be judged by transparent evidence rather than marketing claims.

Before deciding to publish this strategy, I wanted to understand how it behaved across very different market environments.

That meant analysing not only returns, but also drawdowns, volatility, consistency and risk-adjusted performance.

The charts below compare The Retirement Portfolio with two familiar alternatives:

No backtest can predict the future.

Markets change.

Relationships between asset classes evolve.

Strategies experience periods of underperformance.

The purpose of historical testing isn’t to promise future returns.

It’s simply to understand how a strategy has historically behaved under very different economic conditions.

What You Should Expect

One of the biggest mistakes an investment manager can make is creating unrealistic expectations.

So let’s set some realistic ones from the beginning.

There will absolutely be periods when this strategy underperforms.

There will be years when a simple global equity ETF delivers higher returns.

There will be periods when defensive positioning causes the portfolio to lag rapidly rising markets.

That isn’t a flaw.

It’s an inevitable consequence of prioritising drawdown management alongside long-term growth.

If your only objective is to maximise returns regardless of volatility, there are likely to be more aggressive strategies available.

But if your objective is to achieve attractive long-term returns while reducing the emotional and financial burden of major drawdowns, I believe this approach deserves serious consideration.

No strategy wins every race.

The Retirement Portfolio isn’t trying to.

It is trying to help investors stay in the race.

Who This Publication Is For

This publication may be a good fit if you:

• are retired, semi-retired or financially independent;

• care more about preserving wealth than chasing the highest possible returns;

• value evidence over forecasts;

• prefer systematic investing to emotional decision-making;

• want a process that requires only a few minutes each month.

It probably isn’t for you if you:

• want to trade every day;

• are searching for the highest possible return regardless of risk;

• enjoy speculating on individual stocks or cryptocurrencies;

• expect any investment strategy to outperform in every market.

That’s perfectly okay.

This publication isn’t trying to appeal to everyone.

It’s written for investors who understand that avoiding large losses can be just as important as achieving strong long-term returns.

Final Thoughts

Investing is often presented as a competition.

Who achieved the highest return?

Who beat the market?

Who found the next winning strategy?

I don’t see retirement investing that way.

I see it as a problem of endurance.

The investors who ultimately succeed are rarely those who discover the most exciting portfolio.

They’re the ones who discover an investment process they can continue following through both good markets and bad.

That’s the philosophy behind The Retirement Portfolio.

If that way of thinking resonates with you, I hope you’ll join me as we continue exploring what thoughtful, evidence-based retirement investing can look like.

Invest well. Stay invested.

Matthew

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