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Example Completed Perfect Portfolio Worksheet

The below worksheet shows an example "Perfect Portfolio" design of the type that you will create as you move through The Perfect Portfolio book. It includes allocations and trading plans for the nine asset classes defined in the book as part of the Perfect Portfolio Methodology. This is an action plan that you will design to meet your unique investing profile and current market conditions, whether they be positive or negative. It empowers you to immediately begin taking charge of your financial future!

Note the investments and allocation shown in the worksheet are NOT recommendations. They are used for illustration purposes only.

This example worksheet is created by working step-by-step through the Perfect Portfolio Methodology as described in the book where each worksheet entry is discussed in detail.

In my example, Long positions are taken for those asset classes that I believe will thrive in current market conditions and that have price charts showing an up-trend. Short positions are taken for asset classes that I believe will be negatively impacted by market conditions and that have price charts showing a downtrend. For these I have used a "Short ETF", an investment that increases in value when the underlying asset or market decreases in value.

For those asset classes having indicators that are inconclusive, I have put them in a Watch List where I can monitor them with automatic email alerts, but don't actually include them in my portfolio. Note the 0% allocation.

Once put in place, this entire portfolio requires little to no active involvement on my part as selling to stop losses is automated by Trailing Stops and "take profit" alerts come to me automatically via email when specified price points are hit. Action is only required when I get an email either in the form of a take profit alert or a Watch List alert. 

When I get a Take Profit alert I will check the ETF's price chart and decide to either sell to realize profits (never a bad idea) or, if I believe the price trend is still positive, to simply tighten my Trailing Stop and lock in more profits (for example from -$5 to -$3). 

When I get a Watch List alert it means that significant price movements have occurred with the ETF being monitored and I will examine the price chart for a trend and decide if it is time to buy a Long ETF, a Short ETF or simply leave it in the Watch list with modified alert prices. 

Note that in this example I have decided to place trading plans on the Core investments as well as the on the Target Market investments. I believe this is prudent in volatile market conditions. People with 5+ year time horizons may wish to simply buy and hold the Core investments. Trading Core investments is mentioned on page 246 of the book.