TLH Spreadsheet users are familiar with the 16 (cash is excluded) asset classes used with most of the larger ITA Wealth Management portfolios. Below is what I call the Basic Portfolio as standard ETFs are used to populate the different asset classes.
Despite all the asset classes being populated with nearly equal percentages, there is something missing in this portfolio. The projected return of 8.0% meets our first requirement of topping the projection for the S&P 500. It is 7.0% in this analysis. When we examine the projected Standard Deviation (SD) of 16.15% we hit the first hurdle as we want this value below 15%, and the lower the better.
Now scroll down to the Diversification Metric (DM). The portfolio is not all that well diversified since DM is a rather low 27%. While this portfolio covers all the basis, it still lacks the "juice" required to meet all our Quantext Portfolio Planner standards.
Part of the problem reaching our QPP goals is that we are in a high market environment. This same portfolio would have looked better back in March of 2009.
Check out the "Delta Index" as it looked back at the end of March 2009.