Nomadic Samuel Portfolio

The Nomadic Samuel Portfolio is for those with an adventurous spirit. Composed of 80% US Small Cap Value Equities, 80% Long-Term Treasury and 40% Gold it spreads out over an extended 200% canvas.

The Nomadic Samuel Portfolio is bold and courageous while seeking maximum performance. Its an all-weather + expanded canvas portfolio solution that delivers annualized returns higher than its expected volatility. It outperforms equity-only strategies without the rollercoaster ride.

“The Nomadic Samuel Portfolio is bold and courageous while seeking maximum performance. Its an all-weather + expanded canvas portfolio solution that delivers annualized returns higher than its expected volatility. It outperforms equity-only strategies without the rollercoaster ride.” 

It’s the kind of portfolio you’d want to own if you one day decided to hurl a backpack over your shoulders and galavant around the world. It is for those who have stepped out of their comfort zone (in ways big or small) and came through the other side a better more resilient person.

Moving away from your hometown; crossing states/provinces. Accepting a job that equally parts excites and terrifies you.

Taking the first steps necessary to become a better version of yourself and doing that one thing you’ve been putting off for years that has been holding your back.

This portfolio is designed for those who are bold and courageous while demanding performance.

Hey guys! Here is the part where I mention I’m a travel blogger! This portfolio review is entirely for entertainment purposes only. Do your own due diligence and research. Consult with a financial advisor.

Seriously, I’m a travel blogger not a financial professional, so take what I say with a grain of salt; okay? Cheers! 😉 

Nomadic Samuel Banner

A Personal Story Behind The Portfolio

Since this is a portfolio named after me and my travel blog, I need to explain a few things. The guy who now runs multiple successful YouTube channels (Samuel and Audrey + Samuel y Audrey), travel blogs and works on a hotel project in Argentina wasn’t an overnight success.

Along the way I had to overcome a number of challenges and fears to get to where I am today.

University Struggles

The first big one was in University. Having grown up in a small village on an island with a population of roughly 2000, I was overwhelmed pursuing my degree in Edmonton, Alberta. The fifth largest city in Canada.

My first class at the University of Alberta was larger than my entire high school. I struggled with both motivation, purpose and adapting to my new city surroundings for a couple of years changing programs multiple times, dropping out of classes and getting lacklustre grades.

I almost quit.

But over time I got the hang the hang of it; living in a big city, studying and also having fun. Additionally, I picked up a part-time job teaching English to overseas students from Korea while still being a student myself.

Making friends with some of these Korean students gave me the bold idea to try teaching abroad overseas upon finishing my degree.

Nomadic Samuel teaching in South Korea
Nomadic Samuel teaching in South Korea

Moving Overseas For The First Time

My first year teaching English in Korea was exhilarating! I was outside of North America for the first time but I faced new challenges. Firstly, I had to get up in front of a classroom and teach whereas days prior to this I was merely a student.

With no formal training (the only requirement for this job was a degree of any sort) I figured it out along the way; albeit with some rowdy classes before I learned proper classroom management skills.

However, the biggest problem I faced that year was illegal substandard housing provided by the school; put more succinctly – a crumbling shack on top of a roof.

In the winter the pipes froze and I had to purchase multiple electric heaters, an electric blanket and cocoon myself in several layers of bedding to make it through the night.

Remember, I’m Canadian; I can handle the cold. This was something else – inviting the harsh weather from outside to inside was something new.

In the summer it was all about a direct line of communication with the sun roasting this tiny shack. Without air conditioning, I would often take 4 cold showers a day just to deal with my perpetual perspiration problem.

On top of this the shack was infested with cockroaches.

I remember half-way through my contract fantasizing about pulling a midnight runner. This term, given to the often shaky relationship between teachers and hagwon owners (private after-school academies) was commonly referred to teachers leaving South Korea overnight unannounced to get out of a bad job.

I decided to stick it out and save most of my paycheque.

Nomadic Samuel backpacking in Germany
Nomadic Samuel backpacking in Germany

Backpacking Years

Excited by the prospects of taking a backpacking trip I was ready to be bold and adventurous!

My first backpacking trip was to Southeast Asia. I instantly realized travel was my life’s biggest passion at the time. The freedom to move around, wake up in a new place, trying exotic new foods and have my mind blown by new cultural experiences and interesting encounters with both locals and fellow backpackers tickled my every fancy.

I’d repeat the one year teaching overseas assignments in Korea followed by one year backpacking adventures a few more times. It became my new normal.

Turning A Passion Into A Business

On one of my backpacking adventures a friend of mine shared an article describing how long-term backpackers and avid travelers were turning their passions into a job by creating their own websites.

I had to do this!

With zero knowledge of how to set up a website, seo or link building let alone how to take decent photos or videos, I had to learn everything from scratch.

There was a moment where I broke my website for about the 27th and a half time in Penang, Malaysia while sweating in an attic with a poor wifi signal where I almost threw in the towel.

Maybe this wasn’t for me. I could just continue teaching and traveling. However, after a gigantic dim sum breakfast the following morning I decided to persevere. I didn’t quit.

Nomadic Samuel with Audrey in Nova Scotia, Canada
Nomadic Samuel with Audrey in Nova Scotia, Canada

I Met My Wife Because Of My Blog

My last teaching assignment in South Korea is where I met my wife Audrey – a fellow travel blogger and the better half of our YouTube channels.

We met through a link exchange of course! As one does.

I’ll put your blog on my blogroll if you put mine on yours.

It was online dating before online dating was really a thing.

We’ve ever since teamed up as Samuel and Audrey on YouTube (English and Spanish channels) while keeping our original blogging identities separate – Nomadic Samuel and That Backpacker.

New Passion = Investing

I know this is long winded but I feel as though the Nomadic Samuel portfolio needed this long background story.

It’s a story about perseverance. It’s about stepping outside of your comfort zone.

And more importantly it’s about staring down challenges and fears and taking them on.

Had I not been willing to do that I would have never left my small village, lived in big cities, got a university degree, worked overseas, started an online business or met my lovely wife Audrey.

This is the same attitude I’m taking with me for this portfolio strategy and website.

My newest passion is investing! Here I am starting from scratch.

I’m not young anymore. The odds are stacked against me.

I’m late arriving to to the party. It’s already a crowded investing blogging community. I don’t have any industry connections.

But I’m somehow going to make this work. I promise that.

Nomadic Samuel Portfolio Strategy

The Nomadic Samuel portfolio debuted in the leveraged battle of the portfolios challenge (coming soon). It came out of this competition with classic and more famous portfolios not only unscathed but a winner in most cases. It quite frankly surprised me.

It made me realize that the art of putting together the perfect portfolio is an ongoing process and anything but set in stone.

Furthermore, it was a creation using Portfolio Visualizer asset classes. To enter this Portfolio into the portfolio challenge I needed to use what was available.

I ended up finding exactly what I needed.

Dominos 1-2-3
Source: Pixabay

Portfolio Recipe 1-2-3

The Nomadic Samuel portfolio, like all of my portfolios (the others being the Picture Perfect Portfolio and So Trendy), is always made up of three asset classes. Stocks. Bonds. Alternatives.

This 1-2-3 combination of uncorrelated asset classes is really what sets these portfolios apart from others and allows them to leverage-up buttercup in a way that exposes the weaknesses of stocks and bonds only combinations.

This portfolio has a simple and easy to follow recipe:

80% US Small-Cap Stocks + 80% Long-Term Treasury + 40% Gold

Nomadic Samuel Portfolio Allocation
Source: PortfolioVisualizer.com

How the Nomadic Samuel Portfolio differs between the Picture Perfect Portfolio is that it is more geared towards performance and less managing volatility.

With a larger canvas of 200% and a stronger position in equities (80%) it’s got a little more vroom vroom vroom under the hood.

Why Small-Cap Value?

It’s also selecting small-cap value over minimum volatility as its factor strategy.

Small-cap value has the most impressive annual performance track-record of any US equities asset class in the past 50 years.

It beats all of these other US asset classes: US small-cap blend, US small-cap growth, US mid-cap value, US mid-cap blend, US mid-cap growth, US large-cap value, US large-cap blend, US large-cap growth, US micro-cap and US total stock market.

This is a high performance gazelle we’ve got under the hood.  

Equal Pairing of Long-Term Treasury

In order to manage volatility we’ve added an equal amount of Long-Term Treasuries (80%) to handle the inevitable correction and bear market years small-cap value has experienced in the past and will experience again in the future.

The two asset classes pair really well together and especially when owned in equal amounts.

In the past 44 years small-cap US equities and Long-Term Treasury have only been down together on two separate occasions.

In other words, they’ve been extremely reliable partners with one being up when the other is down.

Why Long-Term Treasury over 10 year, intermediate or short?

Two main reasons.

Firstly, Long Term Treasury delivered the greatest portfolio defence out of the four treasury options for the two worst most recent bear-market years small-cap value experienced in 2002 (-14.20% vs +16.67%) and 2008 (-32.05 vs +22.51%).

Secondly, Long Term Treasury outperforms the 3 other treasury options in terms of long-term CAGR.

This is a performance portfolio after-all!

Gold As An Alternative Portfolio Diversifier

Enter gold.

As the sole alternative class representative Gold more than holds its own in diversifying the portfolio.

Its strong performance in the 70s and early 2000s rescued portfolios from weak US equity performance.

Furthermore, since 1978 gold has an incredible relationship with both US small-cap equities and Long-term Treasury.

US small-cap equities and gold have only been negative together annually on 5 different occasions (1990 + 1994 + 1998 + 2015 + 2018).

Gold and Long-term Treasuries have only have combined negative years 7 times (1983+1994+1996+2013+2015+2018+2021).

Down Altogether Only 3 Times

When have all three asset classes been down together?

Only 3 times. (1994+2015+2018)

Given the uncorrelated relationship between the 3 asset classes the Nomadic Samuel Portfolio enjoys enhanced stability and volatility protection while still having the breathing room to perform.

Why The Expanded Canvas

This portfolio benefits from its expanded canvas format of 200% to deliver outsized performance while managing volatility. It ADDs rather than SUBTRACTs.

Its benchmark is the US Total Stock Market since 1978.

The US Total Stock Market delivered its worst year with a return of -37.04%.

In contrast the Nomadic Samuel Portfolio had a worst year of  -12.38%.

Goals Of The Fund

The Nomadic Samuel Portfolio seeks to consistently outperform its benchmark (The Total US Stock Market) in terms of CAGR, offer considerably more volatility protection (less frequent and jarring down years) and be more all-weather & resilient in different economic regimes – given its allocation to three different uncorrelated asset classes.

Its goal is to have a CAGR (annual returns) that is 1:1 or greater compared with its RISK (standard deviation).

The Portfolio seeks to compound at a rates between 12-18%+ annually over extended periods of time.

200% Nomadic Samuel Portfolio Performance

80% US Small-Cap Value Stocks + 80% Long-Term Treasury + 40% Gold 

Initial Balance: $10,000
Final Balance: $63,809,917
CAGR: 21.90%
RISK: 18.82%
Worst Year: -12.38%
Sharpe Ratio: 0.93
Sortino Ratio: 1.52

Nomadic Samuel Portfolio Performance 1978 to 2022
Source: PortfolioVisualizer.com

Initial Balance: $10,000
Final Balance: $407,593
CAGR: 18.13%
RISK: 17.13%
Worst Year: -12.28%
Sharpe Ratio: 0.98
Sortino Ratio: 1.58

Nomadic Samuel Portfolio Performance 2000 to 2022
Source: PortfolioVisualizer.com
Nomadic Samuel Portfolio Annual Returns 1978 to 2022
Source: PortfolioVisualizer.com
Nomadic Samuel Portfolio Rolling Returns 2X
Source: PortfolioVisualizer.com

100% Nomadic Samuel Portfolio Performance

40% US Small-Cap Value Stocks + 40% Long-Term Treasury + 20% Gold  

Initial Balance: $10,000
Final Balance: $989,303
CAGR: 10.94%
RISK: 9.41%
Worst Year: -6.09%
Sharpe Ratio: 0.70
Sortino Ratio: 1.08

Nomadic Samuel Portfolio Performance 1X 1978 to 2022
Source: PortfolioVisualizer.com

Initial Balance: $10,000
Final Balance: $69,810
CAGR: 9.13%
RISK: 8.56%
Worst Year: -6.09%
Sharpe Ratio: 0.89
Sortino Ratio: 1.42

Nomadic Samuel Portfolio Performance 1X 2000 to 2022
Source: PortfolioVisualizer.com
Nomadic Samuel Portfolio 1X Performance
Source: PortfolioVisualizer.com
Nomadic Samuel Rolling Returns 1X
Source: PortfolioVisualizer.com

300% Nomadic Samuel Portfolio Performance

120% US Small-Cap Value Stocks + 120% Long-Term Treasury + 60% Gold  

Initial Balance: $10,000
Final Balance: $2,672,650,317
CAGR: 32.63%
RISK: 28.23%
Worst Year: -19.22%
Sharpe Ratio: 1.00
Sortino Ratio: 1.68

Nomadic Samuel Performance 3X 1978 to 2022
Source: PortfolioVisualizer.com

Initial Balance: $10,000
Final Balance: $1,979,981
CAGR: 26.83%
RISK: 25.69%
Worst Year: -18.55%
Sharpe Ratio: 1.01
Sortino Ratio: 1.64

Nomadic Samuel Portfolio Performance 3X 2000 to 2022
Source: PortfolioVisualizer.com
Nomadic Samuel Annual Returns 3X 1978 to 2022
Source: PortfolioVisualizer.com
Nomadic Samuel 3X Rolling Returns
Source: PortfolioVisualizer.com

Benchmark US Total Stock Market

USA Total Stock Market Pie Chart
Source: PortfolioVisualizer.com

US Total Stock Market Portfolio = 100%

Initial Balance: $10,000
Final Balance: $1,442,461
CAGR: 11.89%
RISK: 15.38%
Worst Year: -37.04
Sharpe Ratio: 0.53
Sortino Ratio: 0.77

USA Total Stock Market Returns 1978 to 2022
Source: PortfolioVisualizer.com
USA Total Stock Market Annual Returns 1978 to 2022
Source: PortfolioVisualizer.com
USA Total Stock Market Roll Period
Source: PortfolioVisualizer.com

Above are the vital stats of the US Total Stock Market as the benchmark vs the Nomadic Samuel Portfolio at 1X, 2X and 3X.

Pros

  1. 1-2-3 All-Weather investing solution of equities + bonds + alternatives
  2. It’s an easy to put together portfolio of just 3 underlying funds
  3. CAGR (annualized returns) which has always outperformed its RISK (standard deviation) for 1X, 2X and 3X versions
  4. Outperforms its benchmark US Total Stock Market with less frequent drawdowns
  5. Worst Year = -12.38% Sharpe = 0.93, Sortino = 1.52 = vs US Total Stock Market = -37.04, Sharpe = 0.53, Sortino = 0.77
  6. Has US Small-Cap values as its equities component (top historical performer of all 11 US equity asset classes on Portfolio Visualizer)
  7. Since 1978 its CAGR of 21.90 has significantly outperformed its benchmark US Total Stock Market CAGR of 11.89

Cons

  1. Leverage averse investors who are prone to recency bias and loss aversion should consider the 1X Nomadic Samuel portfolio
  2. The use of leverage brings the risk of potential greater losses if historically uncorrelated assets become correlated
  3. It’s not a Global equity solution and lacks geographical diversification into International Developed and Emerging Markets
  4. It doesn’t take advantage of other equity, bond or alternative strategies aside from just one each

Total Portfolio Solution

It’s possible you could view the Nomadic Samuel Portfolio as a total portfolio solution but that was not its intention. It is meant to be paired with other expanded canvas 100%+ funds to build a diversified portfolio strategically.

Combined Portfolio Solution

This fund has been designed to pair with other expanded canvas 100%+ funds to create a dynamic puzzle piece in a multi-strategy solution. One example of a 4 fund solution would include:

25% UPAR
25% Nomadic Samuel
25% Go Trendy
25% Picture Perfect Portfolio

Partial Portfolio Solution

You could use the Nomadic Samuel Portfolio as a diversifier in a regular portfolio holding a small allocation of just 5%, 10%, 15% or 20%. It would pair nicely with an all-in-one asset allocation fund for example.

Final Thoughts

It was a lot of fun coming up with the Nomadic Samuel Portfolio as a representation of my life’s journey. I hope you find this portfolio just as fascinating as I do.

It is simple. It performs greater than its risk.

I plan for this product to become an ETF in the near future.

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