Plug & Play ETF Portfolio Models Q3 2020

Summary

  • Read “Using The Plug & Play Portfolio Models” before you do any buying or selling.
  • First off are cash levels appropriate for different investor mindsets.
  • Plug & Play Portfolio Models.

My “Plug & Play Portfolio Models” present investment ideas from our “Very Short Lists” that are near buy zones as of the first week of the new quarter.

These are NOT model portfolios to be jumped into right now! There is no such thing. Anybody who offers a “buy all of these now” model portfolio is telling you to walk through a field where a herd of bulls were recently relieving themselves.

The “Plug & Play Portfolio Models” should be monitored weekly and used to build or rebuild your asset allocation for the intermediate and long term.

Read the Using The Plug & Play Portfolio Models before making any trades. 

Current Cash Level Starting Points

With the Coronavirus, uncertain economy, bankruptcies, supply chain disruptions, high unemployment, low aggregate demand, high stock valuations, high bond valuations (low spreads and yields) and coming elections, I am recommending the most cautious edge of your risk tolerance ranges. That means, your cash level should be at the high-end for your long-term strategic investment posture.

Here are the current cash level recommendations for investors. You can tweak as you see fit. It is your money. I will tend to be more conservative, i.e. cash heavy, as that has worked for me over the years. You can carry less cash if you can sleep at night doing so.

Investor CategoryDefensiveCautiously OptimisticPedal To The Medal
Cash %755015
Who are you as an investor?

Examples:

If you are a cautiously optimistic investor using an ETF portfolio, then you would have 50% of your investable assets in your ETF model of choice and 50% in cash awaiting better opportunities.

If you are cautiously optimistic and splitting your investments between an ETF portfolio and a stock portfolio, then you would have 50% in cash, 25% in ETFs  holdings as seen and 25% stocks.

Global Trends ETF

The strategic gravitation of the Global Trends ETF portfolio is 80% equities and 20% alternatives. The primary goal is maximum long-term total return. The primary focus is on growth. Tactical decisions made in real time will pull us away from or towards the strategic asset allocation depending on where technical indicators and fundamentals are at the time.

ETF EquitiesSymbolBuy Zone%
Invesco QQQ*(QQQ)$192-15024
ARK Innovation(ARKK)$62-4112
iShares Semiconductor(SOXX)$221-1526
Invesco Wilderhill Clean Energy(PBW)$36-296
Invesco Solar(TAN)$37-306
Berkshire Hathaway(BRK.B)$186-1586
VanEck Gold Miners(GDX)$32-2812
SPDR S&P Metals & Mining ETF(XME)$19-166
SPDR Gold Trust(GLD)$163-1303
VanEck Fallen Angels(ANGL)$27.50-256
Currencyshares Australia(FXA)$66-603
Indonesia Ishares MSCI ETF(EIDO)$17.50-133
Germany Ishares MSCI ETF(EWG)$25-193
Australia Ishares MSCI ETF(EWA)$17-11.503

* If an you wanted to split the QQQ position with TDIV to overweight dividend stocks 50/50 as Retirement Trends ETF is doing, that would be reasonable. 

Retirement Trends ETF

The strategic gravitation of the Retirement Trends ETF portfolio is 80% equities, 10% bonds, 10% alternatives. The primary goal is to make an equity like return with less risk than the S&P 500 index. The primary focus is on dividend growth. Tactical decisions made in real time will pull us away from or towards that strategic asset allocation depending on where we are at the time. 

ETF EquitiesSymbolBuy Zone%
Invesco QQQ(QQQ)$192-15012
First Trust NASDAQ Tech Dividend(TDIV)$39-2812
ARK Innovation(ARKK)$62-416
WisdomTree U.S. Dividend Growth(DGRW)$43-316
WisdomTree Hedged International Divi Growth(IHDG)$34-286
Invesco Wilderhill Clean Energy(PBW)$36-296
Global X YieldCo & Renewable Energy(YLCO)$13.50-116
Berkshire Hathaway(BRK.B)$186-1586
VanEck Gold Miners(GDX)$32-2812
SPDR S&P Metals & Mining ETF(XME)$19-166
SPDR Gold Trust(GLD)$163-1303
VanEck Fallen Angels(ANGL)$27.50-256
CurrencyShares Australia:USD(FXA)$66-603
Indonesia iShares MSCI(EIDO)$17.50-133
Germany Ishares MSCI ETF(EWG)$25-193
Australia Ishares MSCI ETF(EWA)17-11.503

ETF Portfolio Notes

There are charts for all of these ETFs in the VSL. All are marked in bright green as top ETFs this quarter. 

Make sure to scale in using the Fibonacci lines which represent support and resistance levels (depending on direction of the market). I typically do not buy at the top of the buy zone unless I am convinced a bull run will start soon.

Generally, I first buy at the next big support area below the very top of the buy range, some sort of Fibonacci confluence (multiple Fib levels in a narrow range), using 1/3 of the money I have allocated for my intended complete asset allocation. For example, one a position that I would like to be 6%, my first buy would be 2%. 

I allocate the rest of my money depending on the volatility of the markets and economic underpinnings of earnings. Again, I look for Fibonacci levels, particularly confluence, and when I see a level coming, I check the other technical signals as noted in:  Technical Trading Basics: Using Overbought And Oversold Signals To Buy And Sell 

Please make sure to ask any questions over time in the forum (Ask Me Almost Anything) thread or in the chat. I know the charts add up to 99% – rounding. If there is a typto let me know below.

Disclosure: I am/we are long GDX, TAN, QQQ, ANGL, GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.