A simple way to add protection to your S&P 500 portfolio, before drinking that "21st beer"
This 3-ETF mix might just be the best core portfolio for many investors, new and experienced. The drinking analogy just makes it easier to understand why.
The markets are angry. Others blame the oil/Iran thing. No me. I go back to one of my most frequently used investing analogies, one which as a very light drinker, I probably have no right to use. But I’m gonna use it anyway. Again.
This portfolio whose past 3-month stats you see below, is one of many simple, risk-managed versions I have built. It only contains 3 ETFs, at all times.
They are free to use at the ROAR research site I created with PiTrade, and you can test out your own strategies, using any combination of ETFs and stocks. This does not signal “success” as much as it indicates there is something different going on.
As the creator of this and many others like it, I can tell you what it is: it is ALWAYS READY for a sharp market change in direction. That’s risk management to me. Not doing it when the headlines change. Doing so does not always produce up returns in a decidedly down market. But it does give me a fighting chance. Because I built it that way, based on what I learned in my old job of managing other people’s money as advisor and fund manager.
It is about giving DEFENSE a full-time role alongside OFFENSE in a portfolio. It is that simple to me. So you can use 2 ETFs, 3 ETFs, 10 ETFs or whatever number you like. Stocks too. As long as you have built your portfolio to play offense and defense at the same time, you are bound to sleep better. That’s my way of thinking, 100%.
Risk management is personal. But the tools we use are all the same. The future will reward those who learn how to use them.
As I relate beyond the paywall, our new site is allowing me to seek out so many different combinations of ETFs and stocks that might work. And ETFYourself.com is where I report my own findings to you. And where you can tell me or ask me about others.