July 15, 2019: Quality Stock Factor ETFs
by MyPlanIQ | Jul 16, 2019 | Asset-Allocation, Bonds, Economy, Feature, Gold, Headline, Income, Inv, Investments, IRA, Markets, Mutual-Funds, newsletter, Portfolios, Retirement
Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.
For regular SAA and TAA portfolios, the next re-balance will be on Monday, August 5, 2019. You can also find the re-balance calendar for 2019 on ‘Dashboard‘ page once you log in.
As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.
Please note that we now list the next re-balance date on every portfolio page.
Quality Stock Factor ETFs
MyPlanIQ adopts asset allocation principle for portfolio management. Our candidate fund selection criteria are:
- For stocks, we advocate low cost index ETFs (or mutual funds)
- For fixed income/bonds, we advocate using a tactical portfolio that selects a fund from a list of high quality total return bond funds (our total return bond fund portfolios).
See March 6, 2017: Asset Classes for Retirement Investments for more detailed discussion.
Quality Factor Indexes
For stock investing, mostly capitalization weighted indexes are used. These indexes such as S&P 500 and Dow Jones Industrial Index normally select companies that have the highest market cap(italization) and weight them accordingly. For example, S&P 500 essentially select top 500 companies with the highest market caps, though the committee still can have option to decide to exclude/include certain companies based on some strict rules. These indexes are intuitive, natural, easy to rebalance and implicitly utilize the momentum factor — the better (higher) a market cap, the more it gets weighted.