Bond Free Portfolio

Investors wary of the bond market should take a look at this portfolio.  Several goals are on the horizon when building a portfolio.  My preference is to see a projected return exceed that projected for the S&P 500 by 100 basis points.  The second goal is to bring the projected standard deviation in under 15%.  The following portfolio manages to do that without allocating anything to SDS, the ultra-short ETF.  The third goal is to see the Return/Risk ratio exceed 0.60.  The following portfolio fails to meet this goal unless a percentage is allocated to SDS.  The fourth goal is to build a diversified portfolio to where the Diversification Metric exceeds 40%.

Platinum members can see the DM falls short of the 40% goal and PA is well below 20%.  The yield, historically, has been a respectable 2.5%.  We have a few income generators in this portfolio.  One of the big drawbacks to this portfolio is the fact that two individual stocks are included.  Both PG and ABT are the type of companies that one can likely hold in perpetuity.  Nevertheless, they are individual stocks and need more monitoring than an ETF such as VTI.

QPP Analysis:  Spend a little time looking over the QPP analysis.  Note the five-year period for analysis.



Correlation Matrix:  The first five holdings are highly correlated and we only begin to pick up lower correlated ETFs and stocks when we move into gold (GTU) and other non-equity instruments.  A five percent investment in SDS would significantly change the parameters.  Anyone interested in those changes?

Correlation Matrix