ETF Portfolio Guide
ETF-Portfolio.comBacktesting Tool
  • ETF Portfolio: Best Backtesting Tool
  • Investing Basics
    • How to Invest Wisely: A Guide to Building Your Portfolio
      • Maximizing Long-Term Compounded Returns
      • A Closer Look: Arithmetic vs. Compounded Returns
    • Asset Allocation: The Key to Building a Balanced Portfolio
      • Understanding Investment Risk
      • Mastering Diversification: Maximizing Returns and Minimizing Risks
      • How Diversification Slashes Investment Risks
      • Power of Asset Allocation
      • Overcoming Behavioral Biases
    • Types of Asset Allocation
      • Static Asset Allocation
      • Tactical Asset Allocation
      • Combining Strategies
    • Why ETFs?
      • Understanding indexes
      • A Comprehensive Guide on ETFs
      • Individual stocks vs. ETFs
  • How-to-Backtest/Stratigies
    • Getting Started
    • What is "Backtesting"?
    • Choosing a Right Strategy
    • Strategy Category
    • A Comprehensive Guide on Asset Classes
      • A Guide to Understanding Economic Cycles
    • Static Asset Allocation Backtesting
    • Backtesting Tactical Asset Allocation
      • Momentum
      • Momentum Filters
      • Crash Protection Option (A)
      • Crash Protection Option (B)
    • Importance of Rebalancing
    • Strategy Examples
    • Combining Strategies
    • Understanding the Backtesting Outcomes
      • Benchmark strategy - 60/40 Strategy
      • Key statistics
      • Performance charts
      • Drawdown
      • Portfolio Details - Assets
  • How-to-choose-ETFs
    • ETFs: Getting Started
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    • Curated ETF offerings
    • Extended Data for US ETFs
    • A Guide to Investing in Dividend ETFs
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    • My ETF Feature
    • Understanding ETF Details
  • FAQ
    • Frequently Asked Questions
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On this page
  • Strategy Categories in ETF Portfolio
  • Static Asset Allocation: The Pillar of Stability
  • Dynamic Asset Allocation: Riding the Waves of Market Trends
  • Unveiling Dynamic Asset Allocation Sub-categories
  • Conclusion: Charting Your Path to Investment Success
  1. How-to-Backtest/Stratigies

Strategy Category

Strategy Category

Last updated 1 year ago

Strategy Categories in ETF Portfolio

Delving into the Dynamic World of Asset Allocation

offers a diverse array of strategies meticulously crafted to suit investors' varying needs. At the heart of our approach lie two key categories: Static Asset Allocation and Dynamic Asset Allocation. Let's explore each in detail to understand their nuances and potential benefits.

Static Asset Allocation: The Pillar of Stability

In the realm of investment, stability is paramount. Static Asset Allocation strategies embody this principle by selecting and holding assets with a well-defined allocation. While the asset mix remains constant, periodic rebalancing ensures alignment with predetermined proportions. This approach minimizes transaction frequency and correlation while maximizing diversification, fostering a robust investment foundation.

Dynamic Asset Allocation: Riding the Waves of Market Trends

Tactical Asset Allocation strategies embrace the dynamic nature of financial markets, responding adeptly to evolving trends. In an ever-changing landscape, predicting the future may seem daunting. However, by identifying and leveraging market momentum, these strategies capitalize on established trends, aiming to ride the wave of market momentum for optimal returns.

Unveiling Dynamic Asset Allocation Sub-categories

Relative Momentum: Surfing the Waves of Relative Strength

This strategy category evaluates multiple assets to discern which exhibits superior momentum relative to others. By identifying assets with strong relative strength, investors can capitalize on emerging trends and position their portfolios for growth.

Absolute Momentum: Harnessing Past Performance for Future Gains

Absolute Momentum strategies assess asset viability based on individual past performance, determining whether an asset should be retained or divested. By leveraging historical data, investors can make informed decisions to optimize portfolio performance.

Crash Protection: Safeguarding Against Market Volatility

In the face of market turbulence, Crash Protection strategies act as a shield, employing dynamic criteria to adjust asset selection and rebalancing decisions. By monitoring leading indicators, these strategies pivot swiftly in response to red flags, safeguarding portfolios against potential downturns.

Moving Average: Navigating Momentum with Precision

Moving Average strategies analyze momentum through the lens of moving average prices over a defined period. By tracking price trends, investors can gauge market momentum and make timely adjustments to their portfolios for enhanced performance.

Portfolio Optimization: Striking the Perfect Balance

Portfolio Optimization strategies employ sophisticated techniques such as minimum variance and inverse volatility to determine asset weights. By prioritizing risk management, these strategies seek to achieve an optimal balance within the portfolio, maximizing returns while minimizing volatility.

Conclusion: Charting Your Path to Investment Success

In the vast landscape of , understanding strategy categories is paramount to crafting a resilient and effective investment approach. Whether you opt for the stability of Static Asset Allocation or the agility of Tactical Asset Allocation, each strategy category offers unique benefits and opportunities for investors to explore. By aligning your investment goals with the right strategy category, you can embark on a journey towards financial success and prosperity.

ETF Portfolio
ETF Portfolio