Carlson's Defense First
TacticalProconservativeBased on research by Thomas Carlson · Carlson, T. (2025). Defense First
This is BestFolio's independent implementation. Not affiliated with or endorsed by the original author.
Launched Jul 1, 2025About this Strategy
Defensive-first approach ranking 4 safe-haven assets (bonds, gold, commodities, dollar) by multi-period momentum. Assets underperforming T-bills are replaced by equities.
The complete strategy logic, asset universe, and rebalancing rules are available to Pro subscribers. This includes the full methodology description, author notes, and implementation details.
Pro subscribers also get access to current signals, full backtest history, and the ability to blend this strategy into custom portfolios.
Strategy Rules
Pro subscribers only
- 1Compute average momentum (mean of 1m, 3m, 6m, 12m returns) for TLT, GLD, PDBC, UUP, and BIL
- 2Rank the 4 defensive assets by momentum (descending)
- 3Assign tiered weights: Rank 1 = 40%, Rank 2 = 30%, Rank 3 = 20%, Rank 4 = 10%
- 4For each defensive asset: if momentum > BIL → hold; if < BIL → redirect that weight to SPY
Key Differentiators
Research Source
Based on research by Thomas Carlson
Carlson, T. (2025). Defense First
Strategy Info
- Type
- Tactical (TAA)
- Frequency
- monthly
- Next Rebalance
- Jun 109:30 ET (10d)
- Variants
- 1
- Risk Category
- conservative
- Tags
- momentum, multi asset
- Type
- Tactical Asset Allocation (TAA)
- Trading Frequency
- Monthly (last trading day)
- Momentum Scoring
- Average of 1, 3, 6, and 12-month total returns
- Ranking
- Defensive assets ranked by momentum, tiered weights: 40%/30%/20%/10%
- Equity Trigger
- Defensive asset momentum < BIL momentum → that slice goes to SPY
- Universe Size
- 4 defensive + 1 equity + 1 risk-free benchmark
- Data Source
- Institutional-grade market data (13 months minimum history)
Asset Classes
Carlson's Defense First at a glance
Carlson's Defense First is a tactical asset allocation (TAA) strategy by Thomas Carlson across Long-Term Treasuries, Gold, Commodities, US Dollar, rebalanced monthly. Backtested 1986-02-28 to 2026-05-20 (40.2 years): 10.9% CAGR, 1.06 Sharpe, -20.3% max drawdown, 10.2% volatility.
- Type
- Tactical (TAA)
- Author
- Thomas Carlson
- Rebalancing
- Monthly
- Risk
- Conservative
- Period
- 1986-02-28 to 2026-05-20
- CAGR
- 10.9%
- Sharpe
- 1.06
- Max Drawdown
- -20.3%
- Volatility
- 10.2%
Carlson's Defense First — Tactical Asset Allocation Strategy
Thomas Carlson's Defense First strategy inverts the typical TAA approach: instead of starting with equities and adding defensive overlays, it starts from a fully defensive posture and only adds equity exposure when defensive assets underperform.
Each month, four defensive assets (TLT, GLD, PDBC, UUP) are ranked by average momentum (1/3/6/12-month returns) and assigned tiered weights: 40%, 30%, 20%, 10%. If a defensive asset's momentum falls below BIL (T-bills), that allocation is redirected to SPY. The result ranges from 100% defensive to 100% SPY depending on how many defensive assets underperform cash.
Backtest Performance (1986-02-28 to 2026-05-20)
| Metric | Carlson's Defense First |
|---|---|
| Compound Annual Growth Rate (CAGR) | 10.9% |
| Maximum Drawdown | -20.3% |
| Sharpe Ratio | 1.06 |
| Sortino Ratio | 1.40 |
| Annualized Volatility | 10.2% |
| Calmar Ratio | 0.54 |
| Total Return | 6401.5% |
| Backtest Period | 40.2 years |
Strategy Details
- Type
- Tactical (TAA)
- Rebalancing
- monthly
- Risk Level
- conservative
- Variants
- 1
- Author
- Thomas Carlson
- Source
- Carlson, T. (2025). Defense First
Asset Classes
- Long-Term Treasuries
- Gold
- Commodities
- US Dollar
- US Equity
Categories
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