Stocks went sideways over the last month while oil, trend-following hedge fund strategies, and bitcoin all surged higher. Months like these show the power of having growth assets other than equities and why family office structures target them. Sturdy+ is currently the best performer YTD, running just ahead of the S&P 500. Sturdy gained 3%, and Simple held steady. No changes to any holdings.
The 2-Minute Version
- Sturdy+ leads our models at +13.2% YTD, just ahead of the S&P 500's +12.7%, and carries the best risk-adjusted return of the three (Sharpe of 1.57, Sharpe Ratio is a measure of return per unit of risk).
- Sturdy has had the smoothest ride. Its worst drawdown (its biggest peak-to-trough drop) is still -5.8%, about two-thirds of the S&P 500's -8.9%. It gained 3.1% on the month and sits at +10.2% YTD.
- Simple slipped 0.4% on the month and sits at +11.9% YTD.
- One tax note: Bitcoin (IBIT) rallied 21% in a month but is still 13% below its January add price. The harvest window is narrowing for investors who have not taken it.
Market Context
The S&P 500 retreated about 1% over the past month after setting 2026 highs in mid-August. The main headlines have been US Treasury bond markets and energy markets. West Texas crude ran from the high $70s to over $90 as the US and Iran traded strikes, and Brent crude tested $100 over the past week. A stronger-than-expected August jobs report pushed the 10-year Treasury yield up to about 4.8% and flipped the conversation from rate cuts to a possible hike at next week's Fed meeting. The US Treasury expanded its buybacks of longer term Treasuries, a move markets read as an effort to steady long-end yields. Stocks and bonds moved little over the month.
Energy (XLE) was up 13% on the month and is now up 44% for the year. Trend-following hedge fund strategies (CTA, a strategy that buys assets going up and sells assets going down) caught the oil and rates moves and gained 12%. Bitcoin (IBIT) bounced 21%. Gold was flat.
Sturdy gained 3% and Sturdy+ gained 4% in a month when the S&P 500 and the 60/40 portfolio both fell. Simple, which is only stocks and bonds, went nowhere.
There are no changes to the holdings or allocation percentages in any of the portfolios this month.
Performance Dashboard
Source: Physicians Invest model portfolio. Hypothetical $100K, not actual returns.
1. "Simple" Portfolio
For: Residents and early-career physicians who want a "set it and forget it" approach.
Strategy: Three ETFs at 60/30/10. Beauty in simplicity.
Advantages: Lowest expense ratios in the lineup (under 0.05% blended; expense ratio is the annual fee an ETF charges, expressed as a percent of assets). Easy to rebalance with three line items. No exotic holdings.
Disadvantages: Concentrated in stocks and bonds. When both go down together (like Q1 2026), there is nowhere to hide. Diversifies across assets but does not perform well when interest rates are increasing (2022).
Tax-Advantaged Tweak: In a Roth or 401(k), investors who want real-estate exposure could add a 5-10% REIT (real estate investment trust) slice carved from US equity (VNQ is one common ETF to use for this). REITs throw off ordinary income that gets taxed at the marginal rate in a taxable account so it should be kept in tax-protected accounts only.
What Changed
No changes this month. The Simple portfolio is designed for long-term holding with minimal intervention. US stocks (VTI) dipped 1%, international (VXUS) added 1%, and bonds (BND) drifted lower as yields rose. Net, a flat month and +11.9% YTD.
Tax Loss Harvesting Opportunities
One holding is slightly underwater:
- BND (Total Bond Market): started the year at $73.32, and its price is now about $71.89, roughly 2% lower. The tax-loss harvesting substitute is AGG. At a loss this small, most investors will find it is not worth the transaction friction.
Mechanics refresher: tax-loss harvesting means selling a position at a loss to bank that loss against future gains (or up to $3,000 of ordinary income a year), then buying a near-identical fund to stay invested. The wash-sale rule applies: buying the same or a substantially identical fund within 30 days before or after the sale, in any of your accounts, defers the loss instead of banking it.
2. "Sturdy" Portfolio
For: Mid-career attendings who want a smoother ride without giving up return.
Strategy: 40% equity / 30% hedge fund strategies / 20% hard assets / 10% bonds.
Advantages: Lower volatility for the same long-term performance as Simple. A much smoother ride without giving up return. Diversifies risk exposures into other risk assets along with stocks.
Disadvantages: Nine holdings means more rebalancing complexity than Simple. Hedge fund ETFs have higher expense ratios (0.65-0.85%) than the equity holdings and take more homework to understand: what they are doing under the hood, how they make money, and when they pay off.
Tax-Advantaged Tweak: Asset location is the practice of placing tax-inefficient holdings in tax-sheltered accounts. Investors applying asset location here would typically place more BND, GLDM, WTMF, CTA, and DBMF exposure in tax-sheltered accounts, keeping more index fund exposure (VTI, VXUS, XLE, IBIT) in taxable brokerage accounts.
What Changed
No changes this month. All nine holdings stay. This was the month the hedge fund sleeve earned its fee: CTA gained 12% as trend-following (a strategy that mechanically buys assets going up and sells assets going down) rode the oil rally and the move higher in yields. WTMF added 2% and DBMF was about flat. In the hard asset sleeve, XLE added 13% and IBIT bounced 21%.
Tax Loss Harvesting Opportunities
The list got shorter this month. CTA is now 8% above its add price, so the small harvest we flagged in August is gone.
The current list:
- IBIT (iShares Bitcoin Trust): started the year at $50.94, now around $44.39, an unrealized loss of about 13%. The substitute is GBTC. A month ago this loss was 28%. Investors who took advantage benefitted.
- BND (Total Bond Market): down about 2%. The substitute is AGG. Too small to bother.
3. "Sturdy+" Portfolio
For: Sophisticated investors comfortable with leveraged ETF mechanics, looking for higher long-term returns than the market and willing to take on volatility.
Strategy: 150% total exposure via stacked ETFs (RSSB, RSST, RSSY, GDE). A stacked ETF bundles two exposures into one ticker, so $1 invested gives you exposure to both at once.
Advantages: Capital efficiency (getting more market exposure per dollar invested) lets Sturdy+ reach 150% exposure while only deploying 100% of capital. Broker margin (borrowed money from your brokerage used to buy more securities than your cash balance supports) is not needed, so the investor avoids any risk of margin calls and avoids inflated borrowing rates. Investors simply buy these ETFs like any other, and the stacked exposures are already baked in. Futures-based holdings get 60/40 tax treatment at the fund level (60% long-term, 40% short-term), which passes through to shareholders more tax-efficiently than you might expect for a leveraged strategy.
Disadvantages: More volatile than Sturdy due to the additional exposure. More complex to understand and requires real effort to learn the mechanics. Stacked ETFs are newer products with shorter track records. Requires comfort with leverage and futures, even though the implementation is straightforward.
How the Leverage Works: Four holdings provide stacked exposure:
- RSST (10% of portfolio) = 10% US equity + 10% hedge fund strategies (trend following: a strategy that buys assets going up and sells assets going down)
- RSSY (10% of portfolio) = 10% US equity + 10% hedge fund strategies (carry: earning the yield difference between holding an asset and financing it)
- RSSB (20% of portfolio) = 20% global equity + 20% bonds
- GDE (10% of portfolio) = 9% US equity + 9% gold
Think of stacked ETFs like combination drugs: Augmentin gives you amoxicillin plus clavulanate in one pill. RSST gives you S&P 500 plus hedge fund strategies in one ticker. Combined with the standalone holdings (DBMF, CTA, IBIT, XLE, SGOV), total exposure reaches approximately 150% while only deploying 100% of capital. No broker margin is required, and a much lower effective borrowing rate than broker margin can be realized.
Tax-Advantaged Tweak: Investors typically prefer holding SGOV in tax-advantaged accounts (Roth, 401(k), 403(b)). Bond interest is taxed at ordinary income and benefits more than the other ETFs from sheltering in tax-advantaged vehicles.
What Changed
No changes this month. Sturdy+ gained 4% and moved to the top of the lineup at +13.2% YTD. The standalone hedge fund and hard asset holdings (CTA, XLE, IBIT) drove the performance. RSSY, the best of the four stacked ETFs at +35% YTD, added 2%, and RSSB and GDE each slipped about 1% as their equity and bond halves stalled.
Tax Loss Harvesting Opportunities
The meaningful move is still bitcoin for investors who have not harvested it.
- IBIT (iShares Bitcoin Trust): a YTD unrealized loss of about 13%, down from 28% a month ago. The substitute is GBTC.
CTA has climbed back above its add price and drops off the list. Everything else in Sturdy+ is above its add price this month.
Methodology
These model portfolios track a hypothetical investment made on January 2, 2026. All prices use adjusted close from Tiingo (accounts for splits and dividends). No transaction costs, slippage, or taxes are modeled. Benchmarks: SPY (S&P 500 ETF) and AOR (iShares Core Growth Allocation ETF, a 60/40 proxy). All metrics annualized where applicable.
The portfolios are account-agnostic. They work in taxable, traditional IRA, Roth IRA, 401(k), or any other account type. Tax-advantaged tweaks are noted per portfolio as suggestions, not requirements.