Diversified VP?

[Fradika]

Friends,

I'm considering a diversified VP, one which gives equal weighting to the following six ETFs:

UUP (US Dollar)
SGOL (Gold)
VTI (Stocks)
TLT (Long Bonds)
SCHH (Real Estate
BIL (Cash)

This seems a reasonably good way to access six sectors in a convenient fashion.  I welcome any thoughts.

[Ad Orientem]

Friends,

I'm considering a diversified VP, one which gives equal weighting to the following six ETFs:

UUP (US Dollar)
SGOL (Gold)
VTI (Stocks)
TLT (Long Bonds)
SCHH (Real Estate
BIL (Cash)

This seems a reasonably good way to access six sectors in a convenient fashion.  I welcome any thoughts.

What is the objective of this VP? Are you looking for more security than the PP offers? Or are you trying to beat the VP? Something else? I guess my point is that in order to evaluate a VP one needs to first know what its purpose is.

[Fradika]

Thanks for writing. In a VP, I guess I'm looking for more security than the PP offers, though I hadn't formulated it in that way.

The volatility seems a bit lower, though that of course also decreases the returns as well. And I don't currently have ETFs, so I thought it might make sense to venture into them with this VP.

[Pointedstick]

If you buy into the PP concept but want more stability and less volatility, you could always just increase cash at the expense of all the other assets. For example:

http://www.riskcog.com/portfolio-theme2 ... f49049849c

[Fradika]

Fascinating, PointedStick, thanks for this. I appreciate it.

[Reub]

I have invested my VP in the Vanguard Wellesley mutual fund, which has a wonderful track record and is diversified with very low expenses. This was recommended to me by others in these forums and I am very happy with it.

[Alanw]

I have invested my VP in the Vanguard Wellesley mutual fund, which has a wonderful track record and is diversified with very low expenses. This was recommended to me by others in these forums and I am very happy with it.

I too have a VP consisting of Wellesley.  It gives my total portfolio a minor slant towards stocks and bonds.  It also diversifies slightly the bond portion with a big share of Wellesley's bonds being high grade corporate.  I do keep my PP separate for rebalance purposes.

[Fradika]

thanks everyone

[melveyr]

Fradika, your portfolio seems very reasonable. I think that having meaningful exposure to stocks, bonds, and some type of commodity/gold (not the producers but the actual 'thing') gets you 90% of the way there.  I am curious why you decided to go with some long dollar exposure. Would you mind sharing your thought process? I also agree with PS that cash can be used as portfolio "diluter" if short term movements are a concern. Another item to explore along the same vein is short term TIPS.

[Fradika]

Melvey, I think with UUP my main curiosity was to get currency exposure because I feel like the currency market is underexamined. I'd be happy(ier) to buy swiss francs (FXF), but now that they are pegged to the euro, I believe the us dollar is probably the most reliable currency.

The VP is still in development, and I really appreciate this ongoing dialogue.