The Greedy When Others Are Fearful ETFdb Portfolio is now available to ETFdb Pro members, offering an option for those who wish to construct a portfolio inspired by the investment principles of Warren Buffett. Investors should note that this ETFdb portfolio is in no way designed or endorsed by legendary investor Warren Buffett; rather it represents our attempt to identify a collection of ETFs that are deemed to be consistent with public statements made by the well-known “Oracle of Omaha”. Buffett is renowned for generating extraordinary returns in all sorts of economic environments, following the ideologies of Wall Street legends like Benjamin Graham and Phil Fisher.
The Greedy When Others Are Fearful ETFdb Portfolio is constructed with several key principles in mind that fall in-line with Buffetts’ investing style. The investment strategy behind this portfolio is inspired by Buffett’s famous statement: be fearful when others are greedy and greedy when others are fearful. This rather basic, contrarian approach advocates buying fundamentally strong stocks when their prices have been absolutely battered down in the stock market. Likewise, it also warns investors of being cautious amidst times of euphoria in an effort to avoid jumping aboard the bull-train right before it derails.
This ETFdb portfolio is split 60/40 between stocks and bonds respectively. The equity component is comprised of ETFs which follow a contrarian approach in the security selection process; in fact, two of the core holdings are focused exclusively on domestic stocks which maintain sound fundamentals but have struggled from a performance perspective relative to the their peers as well as the broad market [see also Why Warren Buffett Hates Gold]. We have also opted for two international equity products which employ an equal-weighted methodology, which is often times considered to have a contrarian, anti-momentum tilt relative to traditional cap-weighted products. The fixed income component includes an allocation to three “riskier” bond ETFs which can be expected to generate a moderate current income, helping to smooth portfolio volatility and improve risk-adjusted returns. This portfolios is likely far too risky for retired investors given its contrarian approach and heavy tilt towards equities, but it may appeal to those with a long-term investment horizon and a stomach for volatility.
The complete Greedy When Others Are Fearful ETFdb Portfolio is available to ETFdb Pro members or with a free 7-day trial to ETFdb Pro. Also check out our new GLD-Free Gold Bug ETFdb Portfolio, as well as our Cheapskate Hedge Fund ETFdb Portfolio.
Also included with the ETFdb Pro subscription are more than 40 all-ETF model portfolios, including both retirement-focused and more tactical themed strategies. [To see all that is included, a free sample of the Emerging & Frontier Markets ETFdb Portfolio is available to all ETFdb readers].