ETF Strategy to make money

One Step ETF Strategy
Some ask how can I make money with an ETF Strategy that will protect me from stock market losses while still making me money? Many think the answer to diversify with bonds, however there is a better way. I am going to show you how to build a one step ETF Strategy that can protect you from big losses and make you money year after year. This method has been fully backtested and proven over the last 25 years.

ETF Background
According to Morningstar only 15% of mutual funds beat the S&P 500 year after year. With this much bad performance it's no wonder that ETF's have entered the picture. Since ETF's are ran by computers the expenses are very low compared to the high cost of mutual funds. The other benefit is you don't have to worry about an ETF having a short term lack of judgment because their manager is having a bad day.

ETF Strategy Solution
The goal was to find a properly diversified mix of equities that yielded around the same annual rate of growth without sacrificing loosing annual gain each year through exposure to bonds. We have found that the proper allocation of:

ETF Strategy Solution Allocation
40% S&P 500
40% REITs
20% Small-Cap Value

The results was a fantastic 13.9% compounded annual gain. This result was not even what made us so exited, the Maximum drawdown over the last 25 years was only 11%. If you compare the maximum drawdown during that period to these drawdowns you will be amazed.

Index Drawdowns
S&P Drawdown: 45%
Russel 2000 Value Index Drawdown: 33%
Russel 2000 Growth Index Drawdown: 63%
Russel 1000 Value Index Drawdown: 28%
Russel 1000 Growth Index Drawdown: 63%

ETF Strategy can reduce your risk like the professional money managers.
Since the S&P 500 Compounded annual gain was only 13.4 we are gaining 1/2 a percent gain while reducing our risk by 4 times. This means that you can beat the S&P 500 while limiting your risk and you will know that your protected against large losses of money.

When did the ETF Strategy Solution loose money?

There was only 4 years that you lost money:

1987: 0.6% loss (not bad considering there was a major crash)
1990: 5.4% loss
1994: 0.2% loss
2002: 4.1% loss (this is when most investors lost 40% of their money)

Sounds great, what ETF's should I buy?
REIT selection: ICF
S&P 500 selection: SPY
Small Cap Value selection: IWN

These etf's were chosen because of their transaction costs were very low compared to others as well as performing slightly better during down markets than their peers.

This ETF model can and will make you money while reducing your risk. So get out there and let ETFs work for you. Remember to let your money work for you, not you for your money!