Outperforming the broader market with a passive portfolio is simpler than most people realize. Listing such a model on the OTC exchange is more viable than most appreciate. Put the two together and we’ll have an investment vehicle in high demand.
Almost any major equity or commodity market can be beaten using just two passive tools… a 3x ETF of the market being tracked, and a high-yield/low-risk dividend ETF. Once a suitable pairing has been selected, it is simply a matter of rebalancing the two instruments once per month to maintain the desired allocation ratio.
The allocation ratio can be 50:50 if no margin is to be used, 50:75 if some margin is to be used, or any board-determined ratio. I would recommend 50:75 (using margin to achieve a total investment of 125% of the total capital), where 50% is invested in the 3x ETF of the underlying market, while 75% is invested in the dividend ETF. Yet the ratio is flexible, depending on the underlying market being tracked, and the economic cycle (expansion/contraction, etc).
For the dividend vehicle, I recommend SHYG (iShares 0-5 Year High Yield Corporate Bond ETF) which regularly yields from 5.5% to 6% annually, paid monthly. The shorter duration bond composition of the fund reduces the negative impact of rising interest rates, which will be the general trend going forward.
For the 3x underlying market vehicle, I recommend UPRO (3x S&P500), TQQQ (3x NASDAQ), and UDOW (3x DJIA) ETFs. Similar structures could be created to track major commodities including gold, silver, and crude oil, where a 3x ETF tracking each market is paired with SHYG in its own portfolio.
Each portfolio would be limited to just two investment instruments: a 3x ETF tracking the underlying target market, and SHYG.
Rebalancing within each portfolio would occur either the last trading day before SHYG’s ex-dividend date (in the case where SHYG is above the target allocation ratio and needs to be reduced), or on the ex-dividend date (in the case where SHYG is below the target allocation ratio and needs to be increased).
With more than 20 years experience trading equities, options, futures, currencies and bonds on my own personal portfolios, I have the experience, knowledge and skills needed to successfully execute the market-beating system described above.
I am open to a wide range of arrangements. My primary aim is to list one or more funds (as described above) on the OTC-QB exchange (middle tier which requires quarterly audits). Once a new investment company is incorporated, the board will decide capital requirements, methods of raising capital (stock and/or bonds), percentage ownership, voting rights, etc. My primary interest is in managing portfolios as described above. The company would not be “mine”. I would work for the company.