In addition to my trading, and in an effort to be as well-rounded of a trader and investor as I can be, I decided to create a long-term, buy-and-hold portfolio. The idea was to be diversified, so that I have strong gains in rising market conditions and minimal losses in falling market conditions.
With that in mind, I put together 18 ETF’s across various sectors, and I plan to manage the portfolio by adding dollars once each quarter (within the first week of January, April, July, and October), buying & selling shares as needed to maintain my desired overall percentages. The amount that I invest will vary, given the fact that my income varies. I plan to put in roughly 10% of what I’ve earned over the last time-period.
I’ve got a definition of an ETF on my “definitions” page, but they’re essentially a “basket” or group of stocks. Instead of buying shares of one company, like Apple, you can buy shares of an ETF, like Invesco QQQ, that encompasses multiple technology stocks. So, even if Apple were to underperform, they’re not the only company you’re invested in and your investment may not underperform with it.
They’re great ways to manage your risk, while still being exposed to the industries you’d like to be invested in — especially for long-term (greater than 5, or even 10 years) investments. Rather than tracking 100+ individual stocks, I only have to track 18 ETFs.
My thought process behind my portfolio was, first off, that I planned to hold indefinitely. I have no plans for this as of right now, simply hoping that it grows at a greater rate than I could get in a savings account — ideally performing on par with, or better than, the market overall.
I wanted to make sure that I had ETFs in sectors that performed well when the economy is doing well, such as food, leisure and entertainment. And knowing that there will be times of economic uncertainty, I included ETFs that maintained when the economy is doing poorly like energy, consumer staples (toothpaste, toilet paper etc.), and healthcare.
Additionally, I wanted to make sure that I thought about the future, so I’ve added ETFs in technologies that are relatively new right now but that I believe will have a great impact in the future; like robotics, AI and self-driving cars. The time to get in to a sector that’s making a large jump is long before that move happens; so I’m hoping to profit down the line with some of these ETFs, not necessarily today.
Lastly, to round out the portfolio, I added in ETFs that tracked sectors that are currently doing well like small- and large-cap technologies; or that I see are simply unavoidable such as Big Data.
Here’s the list of each ETF, the sector they track and the percentage of each one that I’ve allocated to my portfolio.
| Symbol | Description | Percentage |
|---|---|---|
| AIQ | Technology – Big Data | 4% |
| IDRV | Trends – Autonomous Cars | 3% |
| PBJ | Consumer Discretionary – Food & Beverage | 5% |
| PEJ | Consumer Discretionary – Leisure & Entertainment | 5% |
| PSCT | Technology – Small Cap | 7% |
| PSI | Trends – Semiconductors | 4% |
| ROBO | Trends – Robotics/Artificial Intelligence | 3% |
| SKYY | Cloud Computing | 3% |
| VNQ | Real Estate Investment Trust | 7% |
| XLB | Materials | 7% |
| XLC | Communications | 7% |
| XLE | Energy | 7% |
| XLF | Financials | 7% |
| XLI | Industrials | 6% |
| XLP | Consumer Staples | 7% |
| XLRE | Real Estate – Large Cap | 4% |
| XLU | Utilities | 7% |
| XLV | Healthcare | 7% |
If you’d like to see how any one of these ETF’s are performing right now, use the tool below. Simply enter the ETFs symbol into the search bar and you’ll be shown it’s chart and summary. Additionally, the ticker on the sidebar to the right is scrolling through them.