The Balanced Portfolio
A detailed presentation of an ETF Portfolio
Dear Guys,
This is an article for premium subscribers.
First of all I want to say thanks to everyone who is reading my newsletters.
Now, let me better introduce you the Balanced Portfolio.
As I already wrote in the introductory newsletter (Last newsletter) this is a multi-asset portfolio only composed by ETFs and a very small percentage of crypto.
This is a sample portfolio for everyone (all the budgets!) and perfect for people who want to invest part of their income every month, and that have a long term investment horizon (at least 3 years I would say).
Moreover, don’t worry if you are a USD or EUR investor: I will post the same portfolio for both investors, in order to manage the currency risk.
For decades we heard about the 60/40 portfolio (that means 60% equity and 40% bonds) as the best choice to invest with low risk in the long term, but here I am going to propose you a more modern and even a bit more aggressive portfolio, that, at the beginning, will be approximately allocated as follows:
70% equities
20% bonds
5% crypto
5% commodities
Why?
Mainly because I think that bonds will underperform equities in the next few years, and that crypto still have a lot of potential for future appreciation and cannot be excluded in a flexible and modern asset allocation.
How is the portfolio built?
As already said in the introduction the portfolio is built as the sum of two parts:
Core (70%)
Discretionary (30%)
CORE COMPONENT
The core component includes only ETFs on stocks, bonds and gold. It will be the biggest part of the Total Portfolio and it will be subject to low adjustments.
How it performed in the past twelve years?
The performance of the core portfolio has been positive almost every year, with an annualized return close to 10.6% (remember that past returns are not guarantee of future results).
It is diversified asset allocation and able to perform decently in different market conditions.
Here you can see the core portfolio: