Why You Need A Model Portfolio
As an investor you want many things — high return/low risk, low taxes and no roller coaster rides with your account balance (emotional stability). And of course, it helps if you can tell all your friends about your rock solid portfolio strategy while at the neighborhood BBQ. But at their practical core, investors want their investments to provide a mixture of hope for the future and freedom from poverty.
Here’s the good news. There is a method to give you what you want as an investor that is simple, effective, time-tested and requires very little work on your part.
It’s called a Model Portfolio.
A model portfolio is a diversified system of ETF’s (or mutual funds) that are grouped together to provide an expected return with a corresponding amount of risk. The ETF’s the model portfolio holds invest in a variety of assets like large and small stocks, both domestic and international, bonds, Real Estate Investment Trusts (REITs), and perhaps some sector-specific ETF’s. Each model portfolio is automatically rebalanced regularly to sell funds that have gone up in value and buy funds that have gone down in value.
You make one decision: which model portfolio fits your goals and risk tolerance. The rest is done automatically.
A model portfolio is an incredible way to help you get what you want as an investor. With a model portfolio, you receive:
- Market returns
- Efficiency and effectiveness through passive investing
- Saved time. All on-going portfolio management (including rebalancing) is done for you
- Effectiveness because rebalancing is done regularly (studies by Vanguard and others show that rebalancing improves portfolio performance, especially when it comes to managing a portfolio’s overall risk)
Did you know that Aspen Trading clients now have access to the Aspen Slack Channel? Take part in 5 discussion categories:
- Model Portfolio
- Trading Education
- Reading List
Creating a community where we can share ideas and learn from each other is a win/win. Get access to Aspen’s Slack channel today by taking a trial or becoming a client.
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FX: AUD/USD, EUR/SEK
Stocks/Options: IQ, LOW, USO, SC, 10-year notes
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