sector rotation strategy
TRANSCRIPT
8/6/2019 Sector Rotation Strategy
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Sector Rotation Portfolio
How would you like to be able to create a portfolio that outperformed the S & P500 index by 6-7% per year, and you could manage it in a few minutes each month?
Well it is possible and I am going to show you how to do it in this report. By using the
power of ETF's it is possible to outperform the S & P 500 year after year.
If you were a Mutual Fund manager and could deliver results like this you would
be hailed as a superstar and be in constant demand to give your opinions in the financial
media. People would line up to invest with you. But this strategy would not work for a
Mutual fund, the fund could not easily enter and exit the trades like we can as an
individual investor.
This is a really simple strategy. We will look at a small selection of ETF's and
choose to buy and hold the 2 (only 2 of the small list below) that have the highest
current annual performance. We will check that annual performance at the
beginning of each month.
If there is a change we will sell the ETF that leaves the top 2 and buy the ETF that
enters the top 2. Some months nothing changes, some months only one changes out
and some months both change out.
The ETF's that we will use in our strategy are, IVE, QQQ, SPY, MDY, IJS, IJT,
and IWM. Yup, only 7 ETFs. I told you it was simple.
These represent a variety of market sectors. At the beginning of each month we check
the 1 year annual performance and own the top 2. That is it.
There are many websites that will allow you to do this, here is a link to one:
http://finance.yahoo.com/etf/browser/mkt?k=8
The following page shows the results of using this strategy compared to owning
the S & P 500 over a 13 year period.
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Percentage Returns
Year ETF Strategy S & P 500 Index
1998 41.80 26.67
1999 61.73 19.53
2000 -2.25 -10.142001 -3.09 -13.04
2002 -14.09 -23.37
2003 43.43 26.38
2004 12.08 8.99
2005 -1.89 3.00
2006 13.28 13.62
2007 6.77 3.53
2008 -41.00 -38.49
2009 21.29 23.452010 16.97 12.78
2011 7.97 5.94 (through 4/01/2011)
Average return 9.14 2.42
This is a theoretical back test and we did not make all these trades. The returns do not
include the costs of commissions.
You would have averaged 10 trades per year and had an average holding time of 70
days. This past performance does not guarantee future results.
This two minute per month strategy tops the S&P, but my 10 minute per night system
averages 5.7% per month (with compounding), sure it’s a little more work than twominutes per month, but worth it to most.
Helping you retire on time,
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