Gyroscopic Investing

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.

Fradika wrote: 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.

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.

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

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

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.

Reub wrote: 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.

thanks everyone

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.

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.