“Ten” Ivy ETF Portfolio

Ivy 10 Portfolio

As you read through this 10-ETF portfolio, you may want to toggle back and forth between the latest analysis and this analysis I finished approximately four and one-half months ago. When I last analyzed the Ivy 10, little was gained by moving from five to ten ETFs. That is still the case.  In the 10-ETF portfolio, there are not ten different asset classes.  In my classification method, BND and TIP both fall under bonds and DBC and GSG are both commodities. Therefore, the Ivy 10 Portfolio is really and eight asset class portfolio.

As was the case when we analyzed these same ETFs back in August, little is gained by moving from five asset classes to eight asset classes and these 10 ETFs. The Return/Risk ratio remains essentially the same. We do pull down the risk a tad, but we give up a little return and the Diversification Metric (DM) drops a percentage point. While that drop is insignificant, it is not moving in the right direction.

*  Note:  The QPP analysis below is yet another upgrade as the period of analysis runs from 10/4/2007 through 10/3/2011.

[Read more…]

Mosaic Investing

Mosaic Investing

Of the four styles of investing I covered over the last few days, the Mosaic style is the last and my favorite.  While the Mosaic investor tilts toward passive investing, there is still room for selecting a few individual stocks to complete the foundation of a portfolio.  Mosaic is an investing term I coined so it is not something one will read about in the popular investing literature.  It is really a combination of active and passive investing with a significant bent toward the passive and index investing styles.

Characteristics of a Mosaic investor are the following:

1. Follows the principles of asset allocation.

2. Diversifies over the entire world market as much as possible.

3. Trades infrequently.

4. Primarily uses index funds and index ETFs to build the portfolio.

5. On occasion will select a few individual stocks to supplement the index vehicles.

6. Will at times employ Tactical Asset Allocation.

7. Will follow technical indicators but infrequently acts on the information.

8. Follows rebalancing principles.

9. Pays close attention to portfolio risk.

10. Believes the market is efficient.

 

Readers of this blog know I am partial to the Mosaic style of investing.  Until I find something better, I will stick with this investing plan as it seems to be working quite well. While Mosaic investors do follow a fundamental plan of action, they are not stuck in a rut. This is one of the problems I have with the index style of investing. The passive investor comes closest to the Mosaic style of investing, although the passive investor is not inclined to branch off and pick up individual stocks.

There are successful investors to be found in all four camps. My experience led me to this particular approach.