Did our engineered indexes peak your investment interest; but did they still seem a little too risky for what you are comfortable with?
In those indexes we pick US stocks on a monthly basis; and we’ve made an effort to pick stocks across uncorrelated sectors. But at the end of the day, they all still carry US stock market risk. Portfolio management seeks to reduce risk by spreading your investments across many uncorrelated asset classes like international equities, bonds, and gold. So let’s do that with our engineered indexes to engineer a balanced index fund!
In this post we’ll add an allocation to international equities, bonds, and gold to our diversified US equity engineered indexes. What we’ll be left with are two very well diversified funds that have exhibited about half the risk of the S&P 500 while matching, and even beating its returns.