Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Very basic tactical ETF model

|Includes:BND, DJP, VEU, VNQ, Vanguard Total Stock Market ETF (VTI)
Below is a very basic ETF based model that I will begin tracking performance based on September 1, 2009 opening prices in comparison to the S&P 500 Index. The model will utilize 60% equity, 30% fixed income and 10% alternatives allocation target. The model will be tactically rebalanced monthly on the last day of the month based on the corresponding ETF’s 200 moving day average. The tactical decision making process will be if the ETF is trading above it’s 200 day moving average, we will stay in that asset class and if it is below its 200 day moving average, we will move that asset class to a money market. I also plan on tracking a similar models using a larger number of ETF’s that will break the portfolio into more equity style boxes, bond categories and commodity categories. The purpose of this portfolio is to be as simple as possible to allow for the smaller investor to be able to participate, while keeping trading costs reasonable and still being able to achieve a tactically based asset allocation model.
 
AS OF 9/1/2009
TARGET %
ABOVE MA?
TACTICAL %
EQUITY
 
 
 
VTI
40%
Yes
40%
VEU
20%
Yes
20%
 
 
 
 
FIXED INCOME
 
 
 
BND
30%
Yes
30%
 
 
 
 
ALTERNATIVE
 
 
 
VNQ
5%
Yes
5%
DJP
5%
No
0%
 
 
 
 
Money Market
0%
n/a
5%
 
 
 
 
Click to enlarge
Stocks: VTI, VEU, BND, VNQ, DJP