Episode 349: Introducing O.P.T.R.A., a "Trogdor Portfolio"
Jul 3, 2024
33:50
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Explore the new O.P.T.R.A. portfolio with unique funds for diversified exposure. Learn about rebalancing strategies based on Federal Reserve rate changes. Discover the performance of this 'Trogdor portfolio' through backtests and comparisons.
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Quick takeaways
O.P.T.R.A. incorporates diversification in stocks, bonds, and alternatives with strategic allocation principles.
The Optra portfolio focuses on symbols like UPRO, AVGV, GOVZ, GLDM, and DBMF for unique exposures and outcomes.
Deep dives
Introduction to the New Portfolio - Optra
The podcast episode introduces a new portfolio named Optra, consisting of five funds: UPRO, AVGV, GOVZ, GLDM, and DBMF. The portfolio aims to incorporate new ideas and best practices while emphasizing principles like diversification, macro allocation, and simplicity. Each fund represents a different concept like leveraging (UPRO), value tilts and quality overlay (AVGV), extended duration bonds (GOVZ), gold exposure (GLDM), and managed futures (DBMF). The portfolio proportions are set at 50% stocks, 25% bonds, and 25% alternatives.
Selection of New and Innovative Funds
The episode details the selection rationale for the new portfolio funds. UPRO is chosen for its representation of incorporating leverage effectively in a portfolio. AVGV, a fund of funds from Avantis, offers a broad selection of value tilted funds with a quality overlay. GOVZ, an extended duration or strips fund, provides diversification in the bond segment. GLDM and DBMF are chosen for exposure to gold and managed futures, respectively.
Strategic Portfolio Allocation and Management Approach
The podcast discusses the strategic allocation and management approach for the Optra portfolio. The stock, bond, and alternative proportions are set at 50%, 25%, and 25% respectively to ensure a balanced exposure. The episode also presents an experimental rebalancing strategy based on changes in the Fed's interest rate direction, aiming to capture large economic cycles over several years. The episode concludes by encouraging engagement with the new portfolio and providing contact information for further inquiries.
In this episode we introduce a new sample experimental portfolio, the O.P.T.R.A., which is now also featured on the Portfolios Page at the website. It is a mixture of the latest and greatest ideas in portfolio construction.