CPM Investing LLC - Investment Publications
The model portfolios range in their Expected Variability (annualized) and Expected Return (annualized standard deviation of weekly returns). These expectations are based on each model portfolio's simulated performance since January 2000.
The target return objectives for the model portfolios range from 11% to 20%, annualized.
Expected return varies depending on the design of the model portfolio and the aggressiveness of the ETFs used.
VBINX (Vanguard Balanced Index Fund Investor Shares) is also shown on the chart in order to compare our model portfolios with a readily-available mutual fund of 60% stocks, 40% bonds, and no rotation.
Model Portfolio Selection
Step 1: Determine the level of variability of your current investments, and then select a Focused 15 investment model portfolio that has a similar level of variability.
Step 2: Select a model portfolio based on factors including expected returns, variability of expected returns, and the number of ETFs. Having fewer ETFs means easier trading.
If you do not have a strong sense of the level of variability you are comfortable with (many people don't), feel free to contact me directly, and I can recommend a model portfolio for your specific situation.
Below is a sample section from a weekly Focused 15 Investing publication. The target weights for your account are indicated in boldface type. The prior week's target weights are shown to their left, so you can see more easily what changes are being made this week. To the right of the target weights is a column showing an aggressive allocation of the same ETFs with no rotation (Upper Risk Mix). A comparison to the Upper Risk Mix is included in the publication in order to show the value added by active rotation.
The model portfolios aim to achieve high return and low variability. This is best reflected in the ratio of rate of return (annualized) to the variability of those returns (annualized).
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