New Portfolio Lineup versus SPY


October  29 , 2014

This Post is further to my Post of September 27, 2014 ..” My Journey  Continues “.   It represents an effort to design an investment platform for IRA individuals  ( me ) which will squeeze more return from a mildly  uptrending market than I can from SPY.  Year to date, SPY has appreciated  7.9% and I can’t settle for that given my annual expense budget.

The new platform will represent far more ” work ” than simply monitoring SPY.    But,  the offset of this work is that it  will keep me on top of USA and International political and economic developments.  For me,  and that is a huge return  since I consider world events a fascinating giant jigsaw puzzle .  But, I should say,  I don’t know how anybody with a full time job could put in the amount of work I’ve set out for myself.


Here Goes:

# 1 – I reject the notion that my age determines the proportion of my portfolio to be invested in fixed income securities. For instance  60 bonds /40, stocks,  70 bonds /30 stocks etc. My contention is that equity allocation can be anywhere from 100% to 5%  depending on what’s happening in the market. Five %  represents my normal  ” fully invested” cash reserve for  fixed income ETFs.

#2 – I can see from a review of  my activities during  2014 that I always have a lot of money sloshing around in money market accounts because, not being  in sync with the December 30, 2011 VTI trade,  I fear getting  caught out accepting a more than reasonable loss at the point a sell signal is triggered.  I intend to address this leakage as follows…

#3 – Any money not invested ( cash in money market accounts )  will be split between writing short term, out of the money,  SPY Puts for an annual return aimed at  three times the 10 year Treasury note yield.  The balance will be invested in fixed income securities.

Here is the makeup of my planned portfolio

INDEX ETFs – 58% of available investment funds to include ( in proportions to be determined and discussed ) VTI, SPY, IWM, IWB, QQQ, and OEF.

SECTOR ETF FUNDS – Part A ENERGY  – 5%  May Include one or more  ETFs such as VDE, XOP, and OIH

SECTOR ETF FUNDS – Part B – Miscellaneous -5 %  May  Include one or more  ETFs such as  FBT, IYT, XLF, XLV and  ITA .

SMART ETFs 10% – May Include one or more ETFs such as PKW, SYLD,  VIG, MOAT and BFOR

SMART EQUITIES – 7%  – May Include one or more of TWX, DIS, DFS, VZ, CVS,  UNH, C, GLW, and SNE and others as determined by analysis.

MOMENTUM EQUITIES -5%   May Include one or more of  TSLA,FB, BIDU, AAPL, NTES,  AOL, MU, UA

INCOME ETFs  Part A  Dividends 5%  – May Include one or more of DTN, XLU, VNQ, SDY, PFF, VYM ( VIG is included under Smart ETFs )

INCOME ETFs – Part B Interest ( Cash Reserve in lieu of Cash )  5% May Include one or more of IEF, VCIT, LQD,  BND, SHYG,  HYG, JNK,  VGSH, BOND, BSV and VCSH .

TOTAL = 100 % Financial Investment Assets

To determine whether all this work can equal or beat the appreciation I can achieve with one or two  ETF holdings…SPY or VTI. following 200 day, month end rules

Distance: November 1 2014 – May 1 2015 …Buy and  Hold….unless VTI violates its 200 day moving average at a month end.

This platform is hypothetical because I don’t want the extra work of   being  accountable  ( to me or you ) for exact numbers.  This is just to give you a general idea of what I am doing.  I will advise if there is a drastic change in my thinking and always when my Put positions change..

Will indicate on October 31 portfolio makeup to be bought Monday,  November 3, 2014

Richard Maurice Gore



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