Another Profitable Quarter for the Perfect Portfolio

Posted on by The INO.com Team

We first introduced the “Perfect Portfolio” theory in early October and posted updates here and here.

We plan to update the hypothetical “Perfect Portfolio” every quarter to show exactly how you can utilize what I believe is a very conservative, but profitable approach to markets. We're using four, very liquid and well known ETF's that I believe are going to be very important in the investment world for the next three years.

The results of the “Perfect Portfolio” for Q4 were as follows: The ETF GLD that tracks gold bullion managed to gain 8.55% for the quarter. Our next ETF, FXE which tracks the Euro, suffered a small loss of 2.9% for the quarter. The star performer for the quarter was USO, which tracks crude oil. This market had a positive return of 8.63%. Our last ETF is SPY, which tracks the S&P 500, and this market put in a very respectable 5.63% return at the end of December.

The average return for the “Perfect Portfolio” for the quarter was 5.13%. This was lower than some other quarters simply because the markets were less volatile. In the future we expect this portfolio to continue to do well and we will be reporting on this blog on a quarterly basis with the results.

If you have any questions on the hypothetical “Perfect Portfolio” and how you can use this strategy with your own account and brokerage company please feel free to contact our office at 410-867-2100. Any one of our professional member relationship team can help answer questions on the “Perfect Portfolio”.

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

20 thoughts on “Another Profitable Quarter for the Perfect Portfolio”

  1. Tom,

    Thank you for your feedback.

    What you're describing is a whole different trading style to the Perfect Portfolio. We will try to address that sometime in the future with a different style portfolio. At the moment we track two portfolios one is the Perfect Portfolio the other is the World Commodity Portfolio.

    All the best,
    Adam

  2. Adam:

    Can you provide returns utilizing the monthly/weekly returns for us more active investors just for camparison sake to the conservative monthly strategy? Thanks

  3. I'm very impressed with this approach. It takes Harry Browne's "permanent portfolio" concept and adds a great money-management overlay to it.

    I wonder, though, how this would look if you had used the weekly triangles instead of the monthly, for your stop and reverse signals. Intuitively, seems like it might do better in a long term trading-range environment, rather than the extreme intermediate-term volatility experienced during the timeframe to which this has been applied in the videos. And, while it would certainly involve more trades, and brokerage fees, it might capture more uoside and less downside. For those of us whose job involves watching the market on a daily basis, it would not be a burden at all.

    1. Steve,

      Thank you for your feedback.

      The results using the monthly, weekly program could indeed yield better results. It just means that there's a lot more trading and commissions involved.

      The purpose behind the perfect portfolio was for folks who don't watch the market during the day.

      All the best,
      Adam

  4. Adam, Thank you for creating the "perfect portfolio" I was wondering if you would be willing to comment on the idea of selling monthly calls on these holdings for income and a little downside protection? I have owned USO since $24 and change and sell calls each month. Now, I am thinking to do this with the "perfect portfolio" in my son's account. Yes, we cap gains but we enjoy steady income and as I mentioned, some downside protection.

    1. Jack,

      That is not a bad idea, however, I can't endorse it as I am not an options expert nor do I hold myself out to be one.

      I strongly believe that the "Perfect Portfolio" will do well no matter what happens to markets. I believe it gives the kind of financial protection the most investors/traders are looking for in these uncertain times.

      All the best,
      Adam

  5. Joseph,

    That is just E-Trades policy. You might want to check some other brokers who will let you borrow the stock to short.

    By the way SH is the opposite to SPY and puts you in a short position.

    All the best Adam

      1. Joseph,

        The one I am most familiar with which has the highest liquidity is the ETF FXE.

        I would just go ahead and ask E-Trade what they suggest for you.

        All the best,
        Adam

  6. Can't go short with FXE on E-Trade. I wonder then why the recommendation is made to go short? Any suggestions for another Euro dominated ETF.
    Also SPY is listed with monthly issues on E-Trade. I find the differences in the codes between the markets and trade box somewhat confusing. Any clarification is welcome.

  7. Your answer to my first message was:
    Daniil,

    GLD = Gold Bullion
    USO = Crude Oil
    SPY = S&P 500
    FXE = Euro

    Hope this is what you were looking for.

    Best Wishes,

    Lindsay Thompson

    When I see a green triangle on the monthly chart of crude oil, I invest in USO and I am long crude oil, right? My question was, which ETF should I invest in, when I see a new RED monthly triangle on the chart of crude oil? The same question for all 4 above markets.

    1. Danill,

      You should be able to short this ETF. Ask your brokers for details on doing this as certain brokers have different rules.

      All the best,
      Adam

    2. Danill, I am looking for SHORT EFTs as well. I am looking for SHORT SINGLE INVERSE *non leveraged* ETFs.

      http://etfdb.com/etfdb-category/inverse-commodities/

      DGZ PowerShares DB Gold Short ETN
      SZO PowerShares DB Crude Oil Short
      DNO United States Short Oil Fd
      BOS PowerShares DB Base Metals Sho
      DDP PowerShares DB Commodity Short
      PTD E-Tracs Ubs Short Platinum Etn
      ADZ PowerShares DB Agriculture Sho

      Has anyone found others?

  8. In your original video you do not mention the ETFs that go short each one of the 4 markets. Can you please give them now?

    1. Daniil,

      GLD = Gold Bullion
      USO = Crude Oil
      SPY = S&P 500
      FXE = Euro

      Hope this is what you were looking for.

      Best Wishes,

      Lindsay Thompson
      Director of New Business Development
      INO.com & MarketClub

    2. Daniil, i too would like to trade inverse ETFs when the market signals a reversal.

      The EURUSD might be the easiest to short by buying the USDEUR which by definition the inverse.

      The SP500 pair would be SPY & SH as Adam mentioned.

      I found these but not sure if they are leveraged

      DGZ PowerShares DB Gold Short ETN
      DNO United States Short Oil Fund

      at http://etfdb.com/etfdb-category/inverse-commodities/

      Adam etal, whats your opinion on these? Are there better ones (higher market cap, higher volume, lower MER etc?) for single non-leveraged inverse ETFs?

      1. TD,

        Thank you for your feedback and your positive input to this blog.

        I would recommend that readers of the blog check with their individual brokerage companies and see what they recommend in regards to inverse ETF's.

        All the best,
        Adam

  9. I appreciate your successes... and I'm pleased you are providing this for readers. For most areas, however, I think investors can save some money by creating their own ETFs. All they need is some basic knowledge of which stocks are 'best' and some capital (due to owning more than 1 or 2 stocks). Just a thought... I use it and it works for me... another way to pay myself!

    1. Dr Stock, would be interested in knowing how you decide which stocks are best. Would you be willing to help me learn how to do this? I am new to this, but tired of the 'sales pitch' of the mutual fund world and the MERs they charge. TD

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