My Portfolio Advisor

The model is updated monthly but the probabilities do not change that often so you may need to rebalance just few times a year.

Diversified large cap funds/ETF (S&P500 or similar), Total Bond Market funds/ETF and Cash or Money Market funds/ETF. These three asset classes provide the necessary diversification and return for most investors. In addition, this is a lot easier to manage and keeps things simple.

Often times our risk tolerance levels and our return expectations are vastly different. Mathematically it is impossible to achieve both the goals of minimizing losses and maximizing gains with a buy and hold approach. That is where our model comes in. If you are one of the lucky one whose risk-tolerance and return-expectations are close, you can use the buy-and hold strategy (and we’ll tell you that too).

Robo advisors use a traditional allocation approach where they identify your risk tolerance level and find a portfolio for the risk. This portfolio may not get you the desired return for your goal. We identify two portfolios based on your risk and return and rebalance between those based on the model score. We want to achieve both the goals.

We are very aware of the model failing at some point as markets change. There are 2 steps that we have taken to minimize the effects of the model being ineffective.
a) We use a secondary indicator that is purely based on price that tells us when the market is deviating from the model.
b) Since we are taking the traditional asset allocation method and making it better, our recommended portfolio is always between an individual’s risk-portfolio and return-portfolio. Thus, we will NOT do much worse than the traditional approach even when the model fails.

Our target audience is DIY investors that are more than 5 years away from retirement. This can be used by anyone to get a second opinion.