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

Monthly update to the very basic tactical ETF model

Here is the monthly update to the very basic ETF tactical model that I wrote about last month.

To recap, the basis is 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.

The prior month had us fully invested except for our commodities exposure. The portfolio returned (excluding dividends and money market interest) 5.13% versus the S&P 500's 5.92%. Reminder this portfolio is designed, over the long term, to outperform the S&P 500, with less risk and volatility.

As a side note, my model that contains more asset classes had me out of the broad based commodity index and into the gold ETF. That worked out very well as DJP went up 3.18% and the GLD went up 5.27%.

This month, our model has us fully invested in all of our asset classes.

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%
Yes
5%
 
 
 
 
Money Market
0%
n/a
0%