Strategy Using Select Vanguard Funds
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Only hold Vanguard funds
Vanguard's fees are among the lowest. Keeping your cost down is always a good idea if you want to seek the best gains.
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Only hold funds that have buy signals
A fund has a buy signal if
its short-term and long-term trends are positive (i.e. have an upward trend).
This implies that
if I'm holding a fund and either
the short-term or long-term trend
turns negative then I will replace this
fund.
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Hold a maximum of 2 funds and put 50% of
your capital in each fund
This portfolio selects 2 funds from a group of 5 Vanguard funds (NAESX, VEXPX, VPMCX, VWNFX and VEXMX)
that do not contain bond holdings. The 2 funds are selected based on market conditions. If
more than 2 funds have a buy signal then I pick the 2 funds that have the highest
“lossability” indicator (a proprietary one
that I have developed for ranking funds). If any fund I'm holding no longer has a buy signal then I'm replacing it
with a fund that has the highest “lossability” indicator among the funds that I don't already own and that
have a buy signal. If fewer than 2 funds have a
buy signal then I put all my capital in VWESX, a bond fund (i.e. if only 1 out of the 5 Vanguard funds
has a buy signal then I will have 100% of my capital in a bond fund).
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Rebalance once a year
If the allocation among funds is uneven then
I bring the allocation back in line with my target. In this case it
means that I sell shares of one fund to buy shares of
another so that I have the same amount invested in both funds.
I only do this once a year. In my simulations I do this on
the first trading day of each calendar year.
Current Portfolio
Latest Simulated Results for this Strategy
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