Using Limnal in your own accounts

Choose the account

A retirement account is the best home for Limnal: a Roth IRA, a traditional IRA, or a rollover IRA from an old 401(k). Trades inside these accounts are not taxed, so each rebalance costs you nothing beyond the trade itself.

A taxable brokerage account also works. Each rebalance can realize gains, and gains on funds held less than a year are taxed as ordinary income. If you use a taxable account, it is worth talking to a CPA first.

Most 401(k) plans only offer a short menu of mutual funds and cannot hold these ETFs. If your plan has a self-directed brokerage window, you can use that.

Pick a tier

Both tiers run on the same four models and rebalance on the same dates. They differ in how much risk they take.

Decide how much to put in

You can run a whole account on Limnal or only part of your savings. A common approach is to start with one account, such as an IRA, and leave the rest of your portfolio as it is. Watching the strategy through a rebalance or two is a good way to get comfortable with how it behaves before you commit more.

Place the trades

1. Open the Overview and select your tier at the top of the allocation.
2. In the holdings table, type your account value into the Account value box. The table shows the dollar amount to hold in each fund.
3. For a smaller account, switch the table to Consolidated. It folds the same allocation into about 10 funds, which is easier to manage. Brokerages that offer fractional shares make small positions easy to match.
4. Sell any positions that are not on the list, then buy the funds in the amounts shown. The cash line is a Treasury-bill fund (BIL). A money-market fund is a close substitute.

You can start on any day. The held allocation on the Overview is the same for every member, whenever they joined.

Keep it current

The allocation changes when Limnal rebalances, which happens when the model readings move far enough to warrant it. That has been several times a year. The Overview shows the date of the last rebalance and a history of every rebalance with its weights.

A weekly check is enough for rebalances. The weekly letter is a convenient reminder: it arrives with the current allocation and the model readings. When the last-rebalance date on the Overview changes, update your holdings to the new weights. Between rebalances, market moves will shift your weights a little, and you can leave that drift alone until the next rebalance.

The allocation also changes when the risk-off switch turns on. When the trend signals turn bearish, the strategy cuts stocks to 20% of the portfolio and moves the rest into defensive funds. When the trend recovers, it moves back. In the backtest this happened about once or twice a year and usually lasted about two weeks, with the longest stretch at 32 trading days. The published results assume you follow it.

Limnal emails every member the evening the switch turns on or off, with the new target for their tier. Alerts carry the Growth target until you pick your tier in your account, where you can also turn them off. Place the trades at the next market open and hold the risk-off mix until the all-clear email. While the switch is on, the Overview shows a banner and the risk-off target in place of your regular allocation. In a taxable account these trades can realize gains, and buying a fund back within 30 days of selling it at a loss can be a wash sale. A retirement account avoids both.

Read the models

The top of the Overview explains, in plain English, what each of the four models is reading today, which indicators matter right now, and how each reading affects your allocation. The methodology page covers how the models are built.