Jun 27
ETF Portfolio: Five Basic Investments
Below is a basic portfolio that covers U.S. equities, international markets, REITs, and bonds. This is a no-nonsense and uncomplicated portfolio that has a high probability of producing an acceptable (7.2%) return with low risk (11.5%). One could increase the return without incurring too much risk by increasing the percentage in REITs from 5% to 10% and lower the percentage in AGG. Scroll down the page to see the Diversification Metric. I prefer to see this percentage higher than the current 27% value. The DM is close to our minimum of 30% and we like to see it higher. For comparison, one of the Premium portfolios has a DM value of 66%.
As readers will see in other blog entries, it is possible to lift the projected return without too much additional risk provided one is willing to build out the number of asset classes.
Premium readers can expect to hear more about how Tactical Asset Allocation, by using a simple mechanical method, can add value to the buy-and-hold position.
Portfolio questions are most welcome.
Lowell Herr
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