Subject: Re: low draw down ETF portfolio allocation
85% in 3 month Treas Bills, 15% in high momentum stocks.
I want to simplify it more.
How would you or others choose the ETF for the 15%?

That seems pretty simple to me. Not sure it could be simplified further.

I think Elan's "best ETF you can find with an expected 50% max draw down. Put 20% of your money in that ETF, and the rest in cash." is the best you could do.

Of course, there is no way to predict what the max drawdown will be. There was never a drawdown greater than -30%....until there was.


The problem is that you cannot get stock-like returns without stock-like volatility. If you don't want the volatility you have to put the money into some sort of cash, like T-bills. And you will get the low volatility and low returns of cash. Which tend to barely offset inflation.


There is no clever way of arranging 10 pounds of potatoes to fit into a 5 pound sack.


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There are papers that say that, overall, there is not much difference between an 80/20 portfolio and a 20/80 portfolio. Anywhere in that range is about as good as anywhere else in that range.