Building a Strong ETF Portfolio to Beat the S&P


In my last ChartWatchers article, I mentioned that we had started a new ETF feature of the service. This new feature is meant for those individuals who are interested in putting capital to work in ETFs as part of their trading strategy.

Our first ETF Portfolio consisted of 8 different ETF's that were unveiled to our members on October 19, 2020. The ETFs were meant to be held for 90 days, with the objective being to beat the S&P and with the next batch set to be revealed on January 19. So how has the ETF portfolio performed? As of close of business this past Thursday, the ETF portfolio had risen 14.91%, while the S&P had risen 11% over the same period of time. Nice outperformance!

Every ETF in the portfolio has performed well, with the big star being PBW, which has risen 75% (as can be seen in the chart below).

The process of selecting specific ETFs that end up in the portfolio is very time consuming since there are so many ETF's to choose from, and it involves analyzing sector allocations and ensuring that no one ETF is overweight in any one area or stock unknowingly. In other words, we're looking for balance to reduce risk.

While trading ETF's might not seem so "sexy," you can see from the results of our first ETF portfolio that doing your homework can pay handsome dividends. And it all starts with "Knowing What You Own" - what sectors and stocks "lie beneath" the ETF. In fact, our Chief Market Strategist Tom Bowley will be conducting a webinar this Saturday, January 9, at 10:00 am EST, titled "Building an ETF Portfolio the Right Way". This is a FREE webinar open to all members of the community and you can learn more and save a seat by clicking on this link.

Trading individual stocks might put you in a superior position to realize outsized gains. However, trading the right ETF's can prove profitable as well while helping to reduce risk.

At your service,

John Hopkins

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