I've been looking for an alternative to investing in the classic VOO/VTI, BND portfolio. What do you think of this portfolio: - 25% VGT (information technology) - 12% VOX (communications, social media, etc) - 12% VIS (industrials) - 10% VDC (consumer staples) - 10% VPU (utilities) - 10% VHT (healthcare) - 15% VGLT (long term treasury bonds) - 6% VDE (energy)
I backtested it against the SP500 over the last 30 years and it offers higher returns, lower volatility, smaller drawdowns, and lowish beta (~0.7). Many of those ETFs aren't very correlated to each other.
Avoids real estate, financials and consumer discretionary because they are highly correlated with each other, and have been prone to bubble and burst cycles. Their returns are IMO less likely to be drastically improved by technology.
- VGT (technology) is high risk high return
- VDC (staples), VPU (utilities), VHT (healthcare) are more defensive
- VOX (communications) and VIS (industrials) are somewhere in between risk-wise. I still add them because they could be revolutionized further by VR/AR, social media, battery technology, robotics, superconductors, etc.
- VDE (energy) hedges against inflation and geopolitical risk.
- VGLT (long treasuries) hedges against recessions
Thought about adding 5% GLDM. It may increase the sharpe ratio, it tends performs poorly compared to stocks over very long periods of time.
Submitted September 10, 2023 at 04:08AM by lospepes0 https://ift.tt/hC0j5tZ
