As I shared in a previous post, Mark and I have been on a journey of selecting a portfolio of ETF\u2019s to include in the modified three bucket approach.<\/p>\n

After various iterations and experiments, we have settled on a \u201cMagic 8\u201d as the Equity portion of the portfolio (our buckets 3 and 4).\u00a0 At the core of the eight (8) are a set of five (5) sector ETFs from George Dagnino with one substitution:<\/p>\n

VNQ \u2013 Real Estate (replacing IYR) because it has a higher distribution yield, lower expense ratio and higher returns.<\/li>\n<\/ul>\n
Also based upon previous iterations, we have added:<\/p>\n
\n
GLD \u2013 Gold because of is not correlated with the other sectors. This is one of the places where the model invests in down markets.<\/li>\n
XLK \u2013 Technology because it has been the most profitable in previous iterations.<\/li>\n
FDL \u2013 First Trust Morningstar Dividend Leaders because of the dividend production and performance in the model.<\/li>\n<\/ul>\n
Following is the Asset Correlation from PortfolioVisualizer.com.\u00a0 The desire is that the correlation be less than .70 and which we have accomplished with a few exceptions.<\/p>\n
$\"\"$ <\/figure>\n
With the above, the back testing of the model starting in 1\/1\/2003 produces the following results (from AmiPro):<\/p>\n
\n
RAR=8.84%<\/li>\n
Trades = 142<\/li>\n
Win% = 56%<\/li>\n
MaxDD% = -11.89%<\/li>\n
AvgBarsHeld = 144<\/li>\n<\/ul>\n
And from Portfolio Slicer:<\/p>\n
\u00a0<\/p>\n
$\"\"$ <\/figure>\n
In previous iterations, we included a set of bond-based ETF\u2019s for out Bucket2 \u2013 fixed income \u2013 and have concluded that this portion of the retirement portfolio is better suited for a different model.\u00a0 We have selected five (5) ETF\u2019s for this portion of the portfolio and are re-fining it now.\u00a0 Once completed, we will create a separate post.<\/p>\n
Both the equity and bond portfolios and the results from the latest iteration are included in the attached Power BI file.\u00a0 You will need to download and install the free desktop version of Power BI to open it.\u00a0 Do not attempt to refresh if you so since it connects to data in my personal OneDrive (and it will fail).<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Equity ETF Selection January 30, 2021\u00a0by\u00a0Roger Kobel As I shared in a previous post, Mark and I have been on a journey of selecting a portfolio of ETF\u2019s to include in the modified three bucket approach. After various iterations and experiments, we have settled on a \u201cMagic 8\u201d as the Equity portion of the portfolio … Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/pages\/2573"}],"collection":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/comments?post=2573"}],"version-history":[{"count":2,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/pages\/2573\/revisions"}],"predecessor-version":[{"id":2639,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/pages\/2573\/revisions\/2639"}],"wp:attachment":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/media?parent=2573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}