Twelve ETF Portfolio

When designing a portfolio several goals need to be considered.  Here is a blueprint for portfolio construction.

  1. Build the portfolio using non=managed ETFs and index funds.  Don't over complicate by using too many ETFs.
  2. Keep costs low by using inexpensive ETFs.  For most investments we use Vanguard ETFs.
  3. When running a QPP analysis, set these standards.
    • Projected return should exceed the projected return for the S&P 500 by one percentage point.
    • Projected standard deviation (uncertainty) should be less than 15%.
    • Return/Uncertainty ratio will exceed 0.60.
    • Diversification Metric should exceed 40%.

Check out the following portfolio to see if these benchmarks are reached.

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“Delta Factor” Changes Over Last Week

How are the "Delta Factor" projections altered after a positive week in the market?  To answer this question, I listed many of the ETFs used in various portfolios and ran the analysis for two different time frames.  The first screen shot shows the Delta and Delta Factor from 10/3/2007 through 10/3/2011.  The second screen shot captures the data from 10/10/2007 through 10/10/2011.  Examine both the Delta and Delta Factor columns.  Using this first bit of data, I would not invest new money in SLV or GLD, but if I already had shares in these precious metals, I would stay put.  At least that is what the "Delta Factor" is suggesting.

For the Euclid and Maxwell portfolios I will be using VTI, VEU, VWO, VNQ, and RWX.  Look those over carefully in both screen shots.

Pay little attention to VSS, EIDO, FAN, and TAN as they do not have four-year records.

The second screen shot show the same ETFs using the period from 10/10/2007 through 10/10/2011.  Note the ETFs that moved from Buy to Hold.

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