Investment Decisions and Review

This article is part of my series where I review how Freedom Investing performs for the quarter.

Recently, we lowered the duration of our U.S. Bond portfolio and increased the amount which is inflation protected. This article explains the reasons for this change.

While many have been following the domestic returns and recovery, fewer investors know how well foreign investments did this past year.

We are constantly reviewing our portfolios’ asset allocations in order to bring them more in line with our Investment Committee’s best practices. Here is a summary of our recent changes.

This means that in addition to the overall Emerging Market funds, we will have country-specific Emerging Market allocations to both Taiwan and Chile.

No one knows what the future holds for Hong Kong, but we needed to make a decision on whether it has a place in our Freedom Investing.

We would expect the switch to Frankiln funds to save our clients 0.11% annually due to the lower expense ratio.

When reviewing our Foreign allocations, we discovered that the foreign Health Care sector has shown high risk-adjusted performance.

Our Gone-Fishing Portfolios are free to use portfolios that take advantage of the no-transaction-fee, low-cost ETFs or mutual funds of each major custodian. Over the years, we’ve changed the funds and the allocations as new research or securities reveal improvements.

We believe these 26 companies will be an effective weight to add foreign healthcare to our portfolios.

We hope this small increased exposure to foreign healthcare will help capture some of the efficiencies we believe to have found.

We believe that holding on to Energy and waiting for it to recover might mean missing out on greater gains elsewhere.

We decided to add two new sectors after generating several hundred efficient frontier graphs of various United States classifications, industries, and sectors over a variety of time periods.

In this article, I am reviewing the quantitative measurements and performance metrics of Freedom Investing to see how its risk and return compare to the EAFE Index, its benchmark.

Hong Kong has always been an anomaly: a tiny, extremely free country with an expiration date in 2047.

As a result of new fund additions, we added five new country-specific funds to our Schwab Institutional Intelligent Portfolio asset allocations.

These findings together demonstrate how Economic Freedom seems to have been a valid factor for higher expected returns than investing in the EAFE Index alone.

As we are still in the midst of COVID-19 quarantines, we will have to wait to see what continuing or lifting restrictions actually does to companies, their expected earnings, and their market pricing.

Diversification means always having something to complain about. Recently, it has been energy.

For many whose Energy sector has experienced large losses, lowering your sector allocation might effectively mean holding onto the shares that you currently own without adding more.