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ETF
Stock Market
Index Funds Allocation
4-week YTD Performance Trend
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Overview: the U.S.
and international index fund portfolio has been developed to provide a
well diversified allocation of equities. To achieve
optimal portfolio diversification, I have chosen for my model portfolio the best trending
3 to 5 out of 12
sectors ETS. While 3 index fund ETFs are the minimum for smaller
portfolios, the maximum number for larger ETFs should not exceed
5 index fund ETFs.
Allocation:
a portfolio may be funded with 3-6 equally
allocated positions (no more than 25% of your portfolio should be
invested in 1 index fund). Also your portfolio should not exceed 40%
of International Index Funds allocation. I like to buy in increments to see how the market is behaving. The objective is to hold
positions as investment as opposed to swing or day trading.
All sector positions should be rebalanced once or twice a year
because, indexes with exceptional performance seldom continue in the
same pace.
Index Funds Rotation:
every 4-6 weeks I compare the performance of
each Index Fund ETF (see chart below). The least performing index
funds are swapped out and replaced with a better performing index
fund. |
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U.S. & International
Stock Market Index Exchange Traded
Funds
4-Week Price Performance Trend
more...
Active Index Funds Model Portfolio ---
Trend analysis explained...
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Sep. 3, 2010 ~
the week ended with some changes on the up side. As of
this date, Mid-Cap Index (MDY), Small Cap (IWM), Emerging Market Index (VWO)
and Canada Index (EWC) ETF funds are
now the performance leaders Year-to-date.
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(DIA)
DOW 30 Industrials Index
(30 Stocks, Yield 2.4%)
(SPY)
S&P
500 Index
(500 Stocks, Yield 1.8%)
(QQQQ)
Nasdaq 100 Index
(100 Stocks, Yield 0.4%)
(MDY)
S&P Mid Cap Index
(400 Stocks, Yield 1.1%)
(IWM)
Small Cap Index
(2000 Stocks, Yield 1.0%)
(VTI)
Total US Stock Market Index
(3375 Stocks, Yield 1.7%)
(VWO)
Emerging Markets Index
(733 Stocks, Yield 1.2%)
(EWA)
MSCI Australia Index
(74 Stocks, Yield 2.6%)
(EWJ)
MSCI Japan Index
(325 Stocks, Yield 1.3%)
(VGK)
European Large/Mid-Cap
(443 Stocks, Yield 3.9%)
(ILF)
S&P Latin America 40 Index
(33 Stocks, Yield 1.5%)
(EWC)
MSCI Canada Index
(98 Stocks, Yield 1.1%)
*** Yields &
Holdings as of April 2010
click on link above for ETF details provided by
Morningstar.com |
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Re-balancing Portfolio:
the portfolio may be re-balanced every 6-12 month. However with
positions being swapped in and out, the portfolio should stay
equally divided most of the time.
Buy & Sell:
both my portfolios use the same buy and sell
strategy to manage positions.
Brokerage Account:
I suggest, you open a separate account just for speculation. You
can track easily your trading skills and monitor your portfolio's
performance.
Questions & Answers
How to buy equity positions?
I like to buy equity positions in 2
increments.
When to buy inverse (
"short") ETF? I buy the inverse ETF after it has
crossed the moving average. For example, the market is in a down
trend and I want to protect some or all of my long positions. Again don't use it to hit a home run - use inverse ETFs responsibly.
When to use leveraged
ETFs? I use leveraged ETFs for swing trades only. Buying a leveraged ETF at an inopportune time can
set your portfolio back real quick. Timing is a key component for
investing in general, and investing in leveraged ETFs in particular.
I don't buy leveraged ETFs when the market goes through a
consolidation or sideways, because it's difficult to spot a
sustained market direction. Leveraged ETS gain twice as fast but
also lose twice as fast.
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