SPGP - Building A 4% Yielding Sleep Well At Night Retirement Portfolio With 16 Blue-Chip Stocks And ETFs
2024-03-16 07:00:00 ET
Summary
- Building the right portfolio for your needs is essential to achieving your goals. With a great portfolio strategy, you can become confident in achieving your dreams.
- This article highlights the ZEUS portfolio strategy, which focuses on a time-tested, recession-optimized asset allocation that delivers the best total returns per unit of negative volatility.
- 33% ETFs, 33% hedges, and 33% individual stocks enhance a diversified and balanced mix of growth, yield, and value and are wrapped within the highest quality company wrappers.
- The portfolio includes ETFs such as Schwab US Dividend Equity, iShares Russell Top 200 Growth, Pacer US Cash Cows 100, Invesco S&P 500 GARP, as well as 10 individual stocks to boost yield to 4% and long-term return potential to 14%.
- This portfolio has delivered strong returns on the 60-40, while providing two times the yield, and falling just half as much as the S&P during corrections, including a 21% peak decline in the Great Recession and just 14% in 2022.
Today, I'm rebalancing the ZEUS Income Growth portfolio, part of our ZEUS series of model portfolios.
- ZEUS = Zen Extra Ordinary Ultra Sleep Well At Night
This asset allocation is based on the work of Nick Maggiulli, Chief Investment Officer and data scientist at Ritholtz Wealth Management, who found that this allocation was optimal for those seeking maximum returns while minimizing downsides in the bear market for the last 50 years.
- The recession-optimized portfolio
- One allocation you set, forget and rebalance once per year
- You never have to worry about what the economy, inflation, or the Fed are doing
The allocation is 67% stocks, 33% hedges (bonds, alts, specifically managed futures), and the stock bucket is split 50% ETFs and 50% individual stocks (Zen allocation).
Our Zen series of portfolios is 50% ETFs and 50% stocks to gain the benefit of individual stock ownership (superior return potential to an ETF) while still benefiting from the diversification benefits of ETFs.
So, to summarize:
- 33% ETFs (I split them 11.1% yield, 11.1% value, 11.1% growth)
- 33% hedges (I split 16.66% bonds, 16.66% managed futures)
- 33% individual stocks (16.6% high-yield and 16.66% growth)