For those of us who spend more time thinking about investing and spreadsheets, I’m sure there is a high percentage of readers who are thinking; Please Keep It Simple. OK – here it is.
- Use only a few ETFs. One could reduce it to two if necessary. Those two are: VTI and TLT. VTI covers the entire U.S. Equities market and TLT is a U.S. Treasury.
- Run a ranking using, for example, the 4.4.3 CW spreadsheet to see which of the two ETFs is the better performer.
- Invest 75% of the portfolio in the better performing ETF and 25% in the poorer performing ETF. Go to cash when either ETF under-performs SHY. For example, if VTI is under performing SHY, but TLT is outperforming SHY, go to cash with 25% of the portfolio (the VTI portion) and stay invested in TLT with the remaining 75% of the portfolio. If both are under-performing SHY, go entirely to cash or just invest in SHY.
- Evaluate the portfolio at the end of each quarter.
That is it. Do nothing else. If you have any questions, post them in the Comments section of this blog post.