I was giving some thought to this concept of Buy and Hold being dead (my recent post) and I came up with an idea. It would be nice to see a comparison of a Buy and Hold ETF portfolio compared to an actively managed ETF portfolio. As a result, I am planning to create a hypothetical Buy and Hold ETF portfolio as well as an actively traded one. I don't have all the details figured out yet, but I think this might be a good experiment to see which strategy could be better.
I did a few Google searches for "balanced ETF portfolio" and "asset allocation model" and came up with quite a bit of information. One thing to note, there is no such thing as one correct ETF portfolio. There are many factors to consider such as your propensity to risk, your age, the split between stocks and bonds to name a few. What I'll be doing is picking the portfolio that I am comfortable with. After checking out about 5 websites, here is what I think will be my Buy and Hold portfolio:
20% S&P 500
10% Total Stock Market
15% US Small
10% REIT
10% International Developed Europe
10% International Developed Pacific
5% Emerging Markets
10% Intermediate Term Bonds
5% Short Term Bonds
5% Inflation-Protected Securities (TIPS)
This is an ETF portfolio of 10 ETF groups. I haven't selected the actual ETFs yet but will work on that. I also need to research and come up with at least one strategy for the actively traded portfolio. What I'll do is track the hypothetical results and post them here or on http://www.etf-newsletter.com/. Over time, I'll aslo create a free newsletter and send out the results to anyone interested. I'll be back in touch soon.
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