Model ETF portfolios

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sman09
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Model ETF portfolios

Post by sman09 » Tue May 15, 2018 10:06 pm

Dear fellow bogleheads

I see that there are articles in Kiplinger, SeekingAlpha that propose a model ETF portfolio for 2016, 2017 etc., My question is if I base on one of those reputed outlets and construct a ETF based portfolio in 2018 and then in 2019 they propose a different model, what should i do as someone new to investing:

-should i sell-off the components of the 2018 portfolio that are not included in the 2019 model?

-or should i continue to hold on to ETFs that i have already invested in although they are not recommended in a future year?

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Alexa9
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Re: Model ETF portfolios

Post by Alexa9 » Tue May 15, 2018 10:09 pm

Chasing the most popular funds of last year is one of the worst strategies to use.

https://www.bogleheads.org/wiki/Three-fund_portfolio

Sure you can change your strategy (say add some small cap value), but this is the foundation for any portfolio.

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BeBH65
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Re: Model ETF portfolios

Post by BeBH65 » Wed May 16, 2018 1:03 am

On this forum we follow a number of in investment principles.
"Never try to time the market" is an important one. "Stay the course" is another one. "Keep costs low" is also important

Our goal is to build a portfolio that will perform "well" whatever the future will bring us. We will not adapt the portfolio to the sentiments about next year. The market is very difficult to predict.

Having a Lazy passive portfolio will limit the costs and taxes as we are not selling and buying new positions each year.

Have a look at our Bogleheads_investing_start-up_kit on our wiki. Here are some Lazy_portfolios next to the three-fund portfolio mentioned above.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

livesoft
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Re: Model ETF portfolios

Post by livesoft » Wed May 16, 2018 5:16 am

OK, those are reputed outlets, but not reputable outlets. So one should not use them to construct a portfolio. So the question should not even come up.

May I ask if you are serious? Are you really considering basing a portfolio off of something you read in Kiplinger or Seeking Alpha? If so, how would you choose which portfolio to use?
Wiki This signature message sponsored by sscritic: Learn to fish.

alex_686
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Re: Model ETF portfolios

Post by alex_686 » Wed May 16, 2018 10:28 am

BeBH65 wrote:
Wed May 16, 2018 1:03 am
On this forum we follow a number of in investment principles.
"Never try to time the market" is an important one. "Stay the course" is another one. "Keep costs low" is also important
I will modestly take the other side. Why are there updates? Investment theory changes, there are secular shifts in the economy, risk return profiles change.

Should one be static? 2 examples.

30 years ago Emerging Markets was considered to be a very risky proposition. Today, EM indexes are dominated by large multinational companies that look very similar to their developed market companies in terms of economic exposures, corporate governance, etc.

Over the past 10 years bond indexes have seen a increase in duration while yields have fallen. So higher risk for a lower return. What is the correct action? Do nothing? Chase yield? Probably neither.

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David Jay
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Re: Model ETF portfolios

Post by David Jay » Wed May 16, 2018 11:16 am

Alexa9 wrote:
Tue May 15, 2018 10:09 pm
Chasing the most popular funds of last year is one of the worst strategies to use.
Academic studies have confirmed this. It is a losing strategy to select last year's winners.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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matjen
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Re: Model ETF portfolios

Post by matjen » Wed May 16, 2018 11:55 am

OP,

If you want a lasting model ETF portfolio that is tilted toward small cap value then you probably can't do much better than ones designed by our own esteemed Robert T. This portfolio has a 75% equity and 25% bond allocation so adjust as you see fit.

http://socialize.morningstar.com/NewSoc ... C1FF7784FC
A man is rich in proportion to the number of things he can afford to let alone.

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jhfenton
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Location: Ohio

Re: Model ETF portfolios

Post by jhfenton » Wed May 16, 2018 12:10 pm

SANSRN wrote:
Tue May 15, 2018 10:06 pm
Dear fellow bogleheads

I see that there are articles in Kiplinger, SeekingAlpha that propose a model ETF portfolio for 2016, 2017 etc., My question is if I base on one of those reputed outlets and construct a ETF based portfolio in 2018 and then in 2019 they propose a different model, what should i do as someone new to investing:

-should i sell-off the components of the 2018 portfolio that are not included in the 2019 model?

-or should i continue to hold on to ETFs that i have already invested in although they are not recommended in a future year?
I would suggest investing in the 2019 portfolio in 2018. You'll probably do better.

GAAP
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Re: Model ETF portfolios

Post by GAAP » Wed May 16, 2018 12:20 pm

You would be much better off creating ETF versions of any one of the many simple portfolios in the Wiki. Those are low-cost, not subject to investment fads, based upon reasonable knowledge of the market workings, and easy to understand.

If you don't know why you are invested in something, or under what conditions you change that investment, then it is highly likely to be a bad choice.

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Earl Lemongrab
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Re: Model ETF portfolios

Post by Earl Lemongrab » Wed May 16, 2018 12:29 pm

In 2007, I put together my portfolio. I read a number of sources, including Swedroe, Bernstein, Merriman, IFA, and some others. This included studying their model portfolios. I put together a model of my own incorporating ideas from all the sources.

I then created the real portfolio, making adjustments where necessary. After that, I quit reading model portfolios because I was done. Other than changing the stock/bond ratio and shifting some allocations due to changes in the 401(k), I just go along with that.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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