This month, Blue Grasshopper introduced an important improvement to its tactical portfolio engine. The strategy now targets significantly fewer trades per year while maintaining the objective of improving risk-adjusted returns inside employer retirement plans and other type of accounts.
This update is built on extensive testing across multiple market environments and is designed to make the model more stable, easier to follow, and better aligned with the constraints of 40x platforms.
What Changed in the Strategy
The core philosophy is the same: rotate into the strongest assets while avoiding major drawdowns. What changed is how the system decides when a trade is actually worth taking.
Three enhancements were introduced:
1. A stronger emphasis on trend stability
The model now requires clearer evidence that a new trend is forming before making an allocation change.
2. A higher threshold for replacing an existing holding
3. A simplified hierarchy of preferred holdings
Instead of cycling through several similar-looking choices, the strategy now focuses on a smaller set of broad, liquid ETFs (U.S. equity, global equity, and two defensive asset categories).
These changes reduce “noise trades,” help maintain long-term leadership positions, and respect the fact that many 40x plans limit trading frequency.
What the Model Looks Like
Here is the framework at a conceptual level:
- The model evaluates broad equity segments (large-cap growth, broad U.S. market, and global developed markets).
- It monitors two defensive segments (short-duration bonds and a low-correlation alternative asset).
- Signals combine momentum, trend behavior, and relative strength.
- Allocation shifts occur only when a new candidate clearly outperforms the current holding on a multi-factor basis.
- The system operates on a monthly review schedule but trades only when justified by a confirmed signal.
The exact indicators and weighting rules are proprietary.
Expected Number of Trades Per Year
Before this update, the model produced roughly 15+ trades per year across a typical equity portfolio, too high for practical use in many workplace plans.
With the improved structure, the expected number of trades now falls into a much more manageable range:
- Estimated annual trades in quiet year: 5 to 8 trades with an holding period of 6 to 9 months
- Estimated annual trades in volatile year: 12 to 15 trades with an holding period of 3 to 5 months
- Defensive reallocations: only during clear, sustained downturn signals
This aligns with the needs of 40x accounts while keeping the tactical edge intact.
What This Means for You
Users can expect:
- Fewer email alerts and fewer required actions
- Increased allocation stability
- Lower risk of triggering frequent-trader restrictions in workplace plans
- A better balance between responsiveness and discipline
All portfolios inside Blue Grasshopper have been updated to follow the new rules automatically.
Does Fewer Trades Mean Lower Performance?
Our testing shows that performance remains strong. Reducing noise does not weaken the strategy — it often improves results by avoiding marginal trades that add friction but not return.
The goal remains unchanged: help investor capture market leadership while reducing the impact of large drawdowns.
Looking Ahead
We remain committed to continuous improvement, but always with a focus on practicality. The goal of Blue Grasshopper is not just accuracy, it is usability. A strategy is only valuable if investors can implement it consistently.
The new low-turnover framework is an important step toward making tactical investing accessible, realistic, and aligned with the real constraints of retirement plans.
Guillaume
Founder & CEO