Our strategies are comprehensive enough to be implemented for an entire portfolio. From a theoretical point of view, the model takes into account diversification, correlation and risk management considerations. From an empirical point of view, the model has a long history of consistent strong returns with low volatility and drawdowns. Depending on your risk appetite, you may either:
- Replicate the conservative model portfolio
- Replicate the aggressive model portfolio
- Replicate the platinum portfolio
- Replicate the retirement portfolio
- Fine tune the allocation depending on your investment style. For example, an investor with moderate risk appetite may wish to allocate half of the portfolio according to the conservative model and the other half according to the aggressive model. See an example. A mix between the platinum and the retirement portfolio can further decrease risk, volatility and drawdowns while returning around 25% per year on average. And that’s without leverage.
This being said, our strategies can also provide excellent diversification benefits when complemented with other strategies. Indeed, many investors are – rightly so – more comfortable when they diversify their portfolio not only through asset classes but also various strategies. In this regard, one could stress that:
- Our strategies are particularly efficient to boost a portfolio’s return in the context of core-satellite strategies. In this framework, the ETFs selected monthly by the model can form a dynamic satellite portfolio with tactical asset allocation edges. As underlined in this article, this can dramatically improve the return of your portfolio and decrease its volatility and maximum drawdown. You can also use our relative strength strategies to overweight some sectors/asset classes alongside a core ETF portfolio and adapt your overall asset allocation according to market changes.
- Value strategies can also provide a good diversification of strategies. You can also see how we build and manage a core portfolio of strong dividend stocks.
- Our strategies can also usefully be complemented with lowly correlated strategies, such as contrarian strategies or specific dip-buying strategies.
Operationally, our strategies are very easy to implement. At the end of each month, check on the website the new portfolio compositions (in you subscribe to our newsletter, you will receive an email once the new portfolio compositions are posted). On average, between 2 and 3 positions change, which means 2 (or 3) positions are sold and replaced by new ones. The actual trading usually takes place during the first trading day of the new month. One way to implement the rebalancing is to enter a limit order on the that 1st of the new month at the last month’s closing price. If the order is not filled during the day, buy at the close. More information is available in our FAQ section.