These 10 ETFs, combined with the analytics of the ROAR Score, represent a powerful, differentiated way to grow capital with tight, proactive risk management.
Thank you Dom. Specific answer and "perspective" answer.
SPECIFIC: The performance will be back-tested, and that is what we are building into the site next (analytics). Maybe even by this week.
I have done a back-test of the "neutral" allocation to each of the 10 ETFs. That is, with no "alpha" added by the ROAR Score-driven changes in positions, as we are working on this week. But I wanted to see what a "permanent portfolio" version would look like.
The numbers (5 years annualized trailing performance):
Return 6.6% Standard Deviation 5.3%. That combination right there tells me I have a good mix of 10 ETFs, even without ROAR adding value.
Max Drawdown 10.5%. That's where ROAR can help. Lighter drawdown, higher long-term return. Beta to SPY 0.3 (30% as volatile as S&P 500).
10-year annualized return was around 9%.
Worst year was 2022 (7% down, vs 18% SPY)
Best year was 2020 (21% up, since it protected during Covid outbreak)
SPY is NOT what I'd call a best-fit benchmark for the 10-ETF portfolio. It is more like 40/60 or 60/40. Past 5 year for 60/40 were 7% return and 8% Standard Deviation, fwiw.
Since this is a DIY investing platform, my take on all past performance, here or elsewhere, is that it's only good to answer 1 question: what's the chance this strategy will break? In the case of anything I put out the answer is "very slim." Because personally, I sacrifice the big up years in order to not lose big.
That said, the decision for many investors will be "do I want to use the model as research and DIY, or have it copy-traded for me?"
The other thing about back-testing with the 10-ETF portfolio is this: it would only apply to THIS set of 10 ETFs, with THIS set of constraints. In other words, I might not have had the same 10 ETFs in those "slots" the whole time. Most of them, perhaps, but not all.
Markets change what they reward, and so I am what I call "adaptive." Above all else, this is a model portfolio, intended to be a baseline for investors to think about what they really want.
I know the above is not your standard answer. But I'm not your standard investment researcher. I rebel against the cookie-cutter ways that I have seen take too much money from people, because they bought a product...based on what they thought worked.
We will include past performance on any combination of investments we design or anyone else does on their own, using ROAR.PiTrade.com. But investing is personal, unless one hires a fiduciary, who takes on that responsibility. I was a fiduciary for 27 years, retired from being one for 6 years. And I wrote all of that in hopes people will see it and realize not only the difference, but that so many in my field will not make much of an effort to provide that perspective. Because that doesn't sell product, eh?
Thanks again for asking, hope that helps, and I look forward to debuting the analytics on the new site soon.
Excellent article, Rob. Can you share any annualized performance statistics for the 10-ETF portfolio?
Thank you Dom. Specific answer and "perspective" answer.
SPECIFIC: The performance will be back-tested, and that is what we are building into the site next (analytics). Maybe even by this week.
I have done a back-test of the "neutral" allocation to each of the 10 ETFs. That is, with no "alpha" added by the ROAR Score-driven changes in positions, as we are working on this week. But I wanted to see what a "permanent portfolio" version would look like.
The numbers (5 years annualized trailing performance):
Return 6.6% Standard Deviation 5.3%. That combination right there tells me I have a good mix of 10 ETFs, even without ROAR adding value.
Max Drawdown 10.5%. That's where ROAR can help. Lighter drawdown, higher long-term return. Beta to SPY 0.3 (30% as volatile as S&P 500).
10-year annualized return was around 9%.
Worst year was 2022 (7% down, vs 18% SPY)
Best year was 2020 (21% up, since it protected during Covid outbreak)
SPY is NOT what I'd call a best-fit benchmark for the 10-ETF portfolio. It is more like 40/60 or 60/40. Past 5 year for 60/40 were 7% return and 8% Standard Deviation, fwiw.
Since this is a DIY investing platform, my take on all past performance, here or elsewhere, is that it's only good to answer 1 question: what's the chance this strategy will break? In the case of anything I put out the answer is "very slim." Because personally, I sacrifice the big up years in order to not lose big.
That said, the decision for many investors will be "do I want to use the model as research and DIY, or have it copy-traded for me?"
The other thing about back-testing with the 10-ETF portfolio is this: it would only apply to THIS set of 10 ETFs, with THIS set of constraints. In other words, I might not have had the same 10 ETFs in those "slots" the whole time. Most of them, perhaps, but not all.
Markets change what they reward, and so I am what I call "adaptive." Above all else, this is a model portfolio, intended to be a baseline for investors to think about what they really want.
I know the above is not your standard answer. But I'm not your standard investment researcher. I rebel against the cookie-cutter ways that I have seen take too much money from people, because they bought a product...based on what they thought worked.
We will include past performance on any combination of investments we design or anyone else does on their own, using ROAR.PiTrade.com. But investing is personal, unless one hires a fiduciary, who takes on that responsibility. I was a fiduciary for 27 years, retired from being one for 6 years. And I wrote all of that in hopes people will see it and realize not only the difference, but that so many in my field will not make much of an effort to provide that perspective. Because that doesn't sell product, eh?
Thanks again for asking, hope that helps, and I look forward to debuting the analytics on the new site soon.