Wednesday, October 1, 2008

Launch of Hedged Growth Portfolio

As of 10/1, I'm officially adding the Hedged Growth portolio as an option for clients. This portfolio will be the a combination of my existing Growth and Net Payout Yield portfolios plus a combination of shorts. Ideally the portfolio will include a combination of 1/3 of each component. So 1/3 of the stable New Payout Yield stocks, 1/3 of the Growth stocks, and 1/3 Shorts. This will ideally provide a less volatile portfolio that provides more consitent returns regardless of the markets. The Net Payout Yield stocks will provide steady, market beating returns while the Growth and Short sections will provide a market neutral approach with the best of both options. While the Net Payout stocks will be fully invested, the Growth and Shorts will be tweaked depending on the markets with neither to exceed the 33% threshold.

Starting today I've set up fund SFCHG at Marketocracy to start a model portfolio. The expenses on this fund at 2% will be higher then I'd charge clients, but this will provide the opportunity for potential clients to view the results of the portfolio. In addition, since shorting individual stocks isn't allowed on marketocracy I'd be forced to use short ETFs. Not ideal, but still a good example of the portfolio.

Intially purchased BA, UPS, HD, and BMY as Net Payout Yield stocks and RF for growth and SRS to short commercial real estate. RF has a tight stop if the rescue plan is not approved.

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