[ QUOTE ]
Arbitrage is a prime example of a free lunch.
[/ QUOTE ]
So do you have a simple way for clients to use arbitrage in a long-term portfolio without being time consuming?
[ QUOTE ]
My point was if readers here can beat 400nl they can managed risk. So it be stupid for same person to be so diversified. They could invest in 3-4 ETFs and use a longterm risk model(p/e 200Ma)and the returns will be higher with comparable risk then your cookie cutter portfolio. You portfolio has too many positions and is losing EV somewhere.
[/ QUOTE ]
If you are suggesting something with 200-day moving averages, this is not a simple "index investment strategy." You are talking about having to watch your investments. With my portfolio, you can buy, don't pay attention for a year, rebalance, and then go back to not paying attention.
[ QUOTE ]
I was talking about the new ProShares 2x leveraged ETF,s. Not sure why you think these were not ETFs or would not apply to a ETF index investment strategy. You could even use your allocations but replace small caps with ultra Russell 2000 ETF. Reduce the size by half and move the difference into fixed income. Boom less risk for the same return. AKA on your way to a free lunch.
http://www.proshares.com/ [img]/images/graemlins/grin.gif[/img]
[/ QUOTE ]
I have looked at some articles on these. They provide twice the daily returns, but they will not produce twice the long-term returns.
There is a lot of history for portfolios of diversified index funds. We can see what the returns and annual standard deviations have been over lots of time periods. Do you have any type of long history, or theoretical back-testing for the funds? Then show me your allocation (with 50% leveraged ETFs and 50% fixed income), and let's see if your annual returns are higher, and if the risk is really the same or less.
-Tom