US stocks pushed to fresh 2026 highs and carried nearly every other asset class along with them. Gold is the winner up 5% in a month, which is good news for those investors that harvested the GLDM loss in July. Bitcoin remains the year's big loser.
The 2-Minute Version
- Simple leads our models at +12.4% YTD and is at an all-time high, just behind the S&P 500's +13.8%. It also carries the best risk-adjusted return of our three portfolios (Sharpe of 1.46, 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 -5.8%, about two-thirds of the S&P 500's -8.9%. This portfolio sits at +6.9% YTD.
- Sturdy+ has returned +8.8% YTD, helped this month by gold (GDE) and energy (XLE).
- Two tax notes: July's gold harvest (GLDM into IAUM) worked as designed, and the 31-day window to rotate back opens in mid-August, so investors who harvested still have a short wait. Bitcoin (IBIT) is still down 28% for investors who have not harvested it yet.
Market Context
The past month the S&P 500 added about 3% and set new 2026 highs. In July, there was an AI-associated sell-off but the market has largely recovered. The bigger story was the comeback in some of the other asset classes that we believe are important to have exposure to: gold (GLDM) rebounded about 5% and energy (XLE) added another 5%, pushing its year-to-date gain to 28%. Bitcoin traded in the same range as last month, and is still down 28% on the year.
Every portfolio mix saw a boost to performance over the past month. Simple gained about 3% on the month and set a new high, while Sturdy and Sturdy+ each added about 2% and are climbing out of their summer dip.
One follow-up from July: investors who sold GLDM and bought IAUM to harvest the gold loss had a big win. They banked the loss and immediately made back gains in their new exposure vehicle.
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 in environments where 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.
Tax Loss Harvesting Opportunities
One holding is slightly underwater:
- BND (Total Bond Market): started the year around $73, and its price is now about 1.3% 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: the same fund cannot be repurchased within 31 days or the loss does not count.
2. "Sturdy" Portfolio
For: Mid-career attendings who want a smoother ride without giving up long-term 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 away from just 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. Place more BND, GLDM, WTMF, CTA, and DBMF exposure in tax-sheltered accounts and more index fund exposure in taxable brokerage accounts (VTI, VXUS, XLE, IBIT).
What Changed
No changes this month. All nine holdings stay. The hedge fund sleeve was flat while equities rallied, which is what it is supposed to do in a strong rising market: the payoff comes when stocks fall.
Tax Loss Harvesting Opportunities
First, the July follow-up. Investors who harvested GLDM into IAUM last month banked the loss and kept the gold exposure through this month's 5% rebound. Once the 31-day wash-sale window closes in mid-August, they can rotate back into GLDM or simply stay in IAUM, which charges a slightly lower fee. GLDM itself is no longer underwater, so the harvest window on gold has closed for everyone else.
The current list:
- IBIT (iShares Bitcoin Trust): started the year at $50.94, now around $36.80, an unrealized loss of about 28%. The substitute is GBTC. This remains the largest harvest on the board for investors who have not taken it.
- CTA (Simplify Managed Futures): down about 3.4% versus its January add price. No clean substitute exists here, since DBMF and WTMF follow meaningfully different strategies, and a 3.4% loss is not worth breaking the sleeve's diversification for.
- BND (Total Bond Market): down about 1.3%. The substitute is AGG. Too small to bother.
A reminder on the bitcoin trade: investors who harvested IBIT into GBTC earlier this year are past the wash-sale window and can rotate back to IBIT any time. IBIT charges 0.25% a year against GBTC's 1.50%, so there is no reason to stay in the expensive placeholder. (The model itself still holds IBIT. The model does not simulate taxes, so harvest moves are guidance for taxable accounts, not changes to the model.)
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 receive 60/40 tax treatment: gains are split 60% long-term and 40% short-term no matter how long you hold them, making this more tax-efficient 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. The best performer in the lineup, RSSY, is now up 33% YTD, and GDE added 7% this month as both of its stacked exposures (US equity and gold) rose together.
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 28%. The substitute is GBTC.
- CTA (Simplify Managed Futures): down about 3.4% versus its add price. No clean substitute, and too shallow to bother.
Investors who already swapped into GBTC earlier this year are past the wash-sale window and can rotate back to IBIT: its 0.25% fee beats GBTC's 1.50%. 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.