Tuesday, September 21, 2010

SOS How do a medium size investor diversified?

The best way for a small investor to diversify is via ETFs.

All investment are personal. Each have different risk profile and yield expectation. An aggressive investor expect high yield must also have to take high risk. But more importantly, one has to be a dynamic investor.

A dynamic investor must be an investor that reconfigure its portfolio on and off to align with the market trend. However, each investment must have a horizon of 2-3 years holding period, however, it can be replaced by another investment if the new investment is expected to have higher yield than the existing ones.

ETF by countries

ETF by sectors

ETF by type of assets

ETF by commodities

ETF by categories

ETF on currencies

ETF on market capitalisation

ETF on high dividend yield stocks

Inverse ETFs on all the above

MyView

A balance portfolio will look something like this

Global Core

Core Equity
100 S&P Global 100 10%
PID Int'l Div Achievers 5%
DGS Emerging Small Cap 5%

Commodity
SLV Silver 5%
GLD Gold 5%

Country/Sector Overweights
GXF Nordic 10%
JFC Jardine China 5%
EWG Germany 5%EWY
South Korea 5%EWS
Singapore 5%


Fixed Income/Currency
TLT 20 yr Treasury 20%
FXF Swiss Franc 5%

Cash/Inverse
Cash 15%
SH
EFZ
EUM 0%

So one can actually form a portfolio of "Globe Core" for an amount from USD20,000 to USD100,000. Advisable if the porfolio consist of 12 stocks/ETFs period.

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