USMV
iShares MSCI USA Min Vol Factor ETF
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Is my proposed portfolio more complex than it needs to be?
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Probably a good time to lower risk. I’m only 28 so I’ll ride this roller coaster. Consider bonds or other equity like USMV which is a minimum volatility US stock funds that weights non tech stuff a lot heavier.
If you have a long time horizon, that itself is the hedge on market corrections. Sectors like consumer staples and utilities are defensive and will probably fare better than the broader market during downturns, but you are giving up long-term return in exchange for that. Same with ETFs focusing on minimum volatility, quality, or dividend-paying equities. USMV and HDV come to mind. You can do ETF screeners with beta less than 1 to find less-than-average volatiliy. But again with all of this you tend to give up total return in exchange for it.
I would get rid of RSSB and USMV/QUAL and just add to your other positions. Given that you're still young, you don't really need bonds.
Hey man, you're spot on – today's numbers were definitely a mixed bag and didn't really light a fire under the market. Like you said, maybe a *slight* hint of weakness pushing the dollar down, but nothing crazy. It's interesting though, if you look a bit deeper, that drop in 'core capital goods orders' (basically, what businesses are ordering, minus defense and planes) falling 1.3% *is* a bit of a heads-up. It suggests companies might be getting a bit cautious with their spending. That often gives a clue about how industrial stocks (like XLI) and smaller companies (like IWM) might do, and both have been a bit sluggish lately, so it kind of fits. This ties into the bigger 'vibe' of the economy right now – feels like we're in a phase of slower growth but also low inflation. If you look back at times like these, usually 'safer' bets like healthcare (XLV), low-volatility stocks (SPLV, USMV), and solid bonds (AGG) tend to hold up better. Just thinking out loud, but it's a pattern worth watching. If you're into this 'big picture' macro stuff and how it can connect to your own investing, we actually break down these economic 'regimes' and share model portfolios based on them over on our site, [**macrolookup.com**](http://macrolookup.com), which you can check out. We try to make institutional-level insights accessible for regular investors. Might be helpful if you're looking for ways to navigate these kinds of markets! Hope this helps add another angle to your thinking.
Low to medium risk USMV!!
Think there's a happy medium between HYSA and QQQ. Could just buy the market with VOO or go USMV if you're low net worth
In the past, I would say buy in what you understand and believe in. Dips hurt less if you at least know that you invested responsibly and ethically. Now, I'm not really sure what that even looks like. Massive fluctuations triggered by headlines and political statements is just not how I want to invest. Now BALT, USMV, SGOV and QLEIX exclusively. Long-term retirement investment is still monthly contributions in broad etfs. I'm not claiming that this is the way for anyone else, it's just where I have landed.
I am still mostly invested but pulled a big chunk out of the small cap extended S&P fund that I had. Just going to sit on that in cash or maybe USMV until the next big down move.
Oh I would never suggest to invest your money into something as stupid as treasury bills. The risk-free rate is just a way to compare your fixed rate mortgage to current market rates. But even if the risk-free rate were as low as 3.5% it would still be way better for this guy to invest in the market... USMV great choice
USMV etf and chill... Since you'd like to retire in only 15 years. Otherwise, I'd say VOO... Problem is VOO price-to-book right now is super high
Warm up with a light beer first… You should do some long dated options on lower volatility stuff… like calls on WM, USMV, SPLV… you went straight for the cocaine with 2x VIX etf (UVXY)…
If you're really that scared of the market being "unsafe" as you say, then put your money into USMV. Will get you so much more of a return than paying down your measly 4% mortgage. God if i had a 4% mortgage, I'd pay the bare minimum. It's actually the objectively optimal thing to do
Because of this administration's flip-flopping, I choose some low volatility ETFs. A combination of AOA, USMV, VFMV, SMMV, and SCHD, because it's has less drawdown. I can sleep better at night knowing it's a bit diversified with different caps.
In November when the markets started to drop I sold a VOO position right before I entered the red. Now I'm dollar cost averaging into low volatility ETFs like USMV, SPMV. The DCA will last a for a few years. I think it was a wise decision, to DCA slowly into the dip, and DCA back out. Other's will feel the opposite; that lump sum at any moment in time is the best option. but it depends on how long you have to recover. If you have 30 years it likely won't matter, but for those who just want to buy index funds and hold for 5 or 10 years, a a market crash is a big deal and you likely won't recover buying at the top.
Ended up transitioning to ETFs including DURA, VEU, USMV, LVHD, and RSP. Only stocks I kept were BX, MSFT, and GS. Also lessened my allocation to VOO, and QQQ. Impossible to pick an individual stock or sector when you don't know what the administration will target next.
There are low volatility ETFs like USMV and SPLY. Also, actively managed funds have the possibility of lower drawdowns during market crashes. The least recommended way is to buy an inverse S&P 500 ETF.
SPHB. It's not beta-weighted precisely, but... Wait, you want an inverse beta-weighted fund, not a beta weighted fund? There's a bet-against-beta factor. BTAL is a market neutral version, but you want market exposure. I thought there were more BAB but now that I look, they are mostly using the similar min-volatility factor, like USMV SPLV VFMV SPMV. But that should work for your purpose.
USMV is not exactly what you're asking for, but similar concept
If you want a low-beta, low volatility index fund, USMV (iShares US Minimum Volatility index fund) might be worth looking at. It's overweight health care, consumer staples and utiities compared to the S&P 500 and it's a lot less volatile. You pay a price in the form of lower longer-term growth, though.
[Try USMV or DBMF instead](https://testfol.io/?d=eJzNj1FLw0AMx79Lnu%2BhCnNwjzL2ogVBJoqMkvXS7vR2t%2BZih5R%2BdzMqWARfZXlK%2BIV%2FfhmgDWmH4QEZDxnsAFmQpXIoBBbAAEU3mybaYwB7VWgZQPdW%2BdgEFJ8i2AZDJgM15n0T0gls8TNUDVOnOS%2BEHD41jVMIPrbVyUd33r0pRgPHxNKk4JPqvA4Q8fB928eesqx8751KKRX%2B0FNM6o%2BxpvWvdPH1O%2FGUMvVKpes6ZUfimqKAvV6MZoZ3oq%2FN8HIxbg04xlY%2FOW%2F%2Br85deV8%2BX5DP6rZcX5LP5rF8%2BltnO34BI0v1Aw%3D%3D)
USMV / MVOL are good options depending on where you live (pick whichever is available). They only invest in stable companies.
I like USMV and AVGV as well despite AVGV' higher expense ratio.
I mean sure….i don’t play MSFT like that. It’s the 2nd place I put my winnings after USMV and just let it do its thing.
Hedging a position isn't the same thing as timing the market, and wanting to hedge a position consisting of mostly or entirely US large cap stocks is IMO a sensible thing to do at the moment. Possible hedges could include upping your allocation to non-US equities, buying less volatile equity ETFs like USMV, and increasing your fixed income.
Well for 10 years i would personally do something like 70% SGOV and 30% USMV. USMV is a low volatility stock fund that will almost certainly boost your returns for a 10 year time frame compared to cash alone (100% SGOV). I wouldn’t go more aggressive than this for your needs.
If volatility scares you then you might consider a minimum volatility etf like USMV. It will make you much more money in the long run
I woke up one morning, and I had one question, could Low-Volatility Dividend Stocks Be a Smart Choice for noob investors? The stock market can be a wild ride, especially in times of uncertainty and volatility. That's why many investors look for ways to reduce their risk and protect their capital, while still generating income and growth. One strategy that can help achieve this goal is investing in low-volatility dividend stocks. Low-volatility dividend stocks are stocks that have a low beta, which means they tend to move less than the overall market. A beta of less than 1 indicates that the stock is less volatile than the market, while a beta of more than 1 indicates that the stock is more volatile than the market. Low-volatility stocks can offer several benefits, such as: - Smoothing out the returns and reducing the drawdowns during market downturns - Providing a steady stream of cash distributions that can be reinvested or used for other purposes - Signaling confidence and financial strength from the management, as dividends are usually paid from earnings or free cash flow - Offering the potential for dividend growth, as companies with low-volatility tend to have stable and growing earnings Of course, not all low-volatility dividend stocks are created equal. Some factors to consider when choosing the best ones are: - The dividend yield, which is the annual dividend divided by the share price. A higher yield means a higher income, but it can also indicate a higher risk or a lower growth. A reasonable range for dividend yield is between 2% and 5%, depending on the industry and the market conditions. - The dividend growth, which is the percentage change in the dividend over time. A higher growth means a higher income and a higher capital appreciation, as dividends tend to reflect the earnings growth. A consistent track record of dividend growth is a sign of a healthy and profitable business. - The payout ratio, which is the percentage of earnings or free cash flow that is paid out as dividends. A lower ratio means a higher safety and a higher flexibility, as the company can retain more earnings for reinvestment or debt reduction. A higher ratio means a higher income, but it can also indicate a lower sustainability or a lower growth. A reasonable range for payout ratio is between 30% and 70%, depending on the industry and the market conditions. Based on these criteria, here are some examples of low-volatility dividend stocks that can be attractive for investors: - Walgreens Boots Alliance (WBA), with a beta of 0.75, a dividend yield of 4.2%, a dividend growth of 6.5% per year for the last 10 years, and a payout ratio of 41% of earnings ¹ - Lockheed Martin Corporation (LMT), with a beta of 0.87, a dividend yield of 3.0%, a dividend growth of 11.6% per year for the last 10 years, and a payout ratio of 40% of earnings - McDonald’s Corporation (MCD), with a beta of 0.58, a dividend yield of 2.2%, a dividend growth of 9.8% per year for the last 10 years, and a payout ratio of 64% of earnings - iShares Edge MSCI Min Vol USA ETF (USMV), with a beta of 0.75, a dividend yield of 1.8%, a dividend growth of 9.4% per year for the last 5 years, and a payout ratio of 42% of earnings - Invesco S&P 500 Low Volatility ETF (SPLV), with a beta of 0.75, a dividend yield of 1.9%, a dividend growth of 8.7% per year for the last 5 years, and a payout ratio of 46% of earnings - iShares Edge MSCI Min Vol Global ETF (ACWV), with a beta of 0.66, a dividend yield of 2.1%, a dividend growth of 7.2% per year for the last 5 years, and a payout ratio of 51% of earnings These low-volatility dividend stocks can offer a balanced mix of income and growth, while reducing the exposure to market fluctuations. They can be a smart choice for investors who want to diversify their portfolio, enhance their returns, and sleep better at night.
how do you think the risk of stocks are measured? Remember finance 101? CAPM? MPT? Beta? Sharpe Ratios? What do people even buy bonds? What is $30Billion doing in $USMV?
Never put your all eggs in one basket. Take a look at this mixture for example: - 40% Bonds (BND) - 20% Dividend Stocks & REITs (VIG, SCHD, VUG) - 10% Covered calls ETF (JEPI) - 10% Low Volatility ETFs (USMV, SPLV) - 10% Inflation linked Bonds (TIP) - 10% Short-term Treasury (SHV) Doesn't that seem more sustainable for the long term?
60% USMV 40% KMLM make money slow and steady and guard against huge declines.
Sorry long weekend. Under stocks and related it says USMV EFAV IEFA GOVT TFI HYD VUG BNDX VTV
Was surprised from the start that why no one suggesting the USMV
Equities go up and down, that's just what they do. Many people will tell you VT/VTI are your best bet in any market. If you're front loading I guess you won't have the benefit of DCA to smooth it out, so if the volatility frightens you, there are some other options. - Low volatility ETFs consisting of value stocks, which are going to be less volatile than the big growth stocks, e.g. USMV. - Diversify with uncorrelated and less volatile assets. Obviously bonds are an option, but also consider a managed futures (KMLM) or long/short equities "beta neutral" (BTAL) strategy, but be aware these types of funds cost more. - If you're really uncertain, just throw everything into a tbill ladder and call it a day.
Any thoughts on low volatility USMV or SPLV?
I am in the same boat and was about to start a thread on this topic. ​ Met with an advisor that has worked with my wife's family for quite some time. We currently have a small portfolio with them ($20K) from before we were married. The portfolio consists of 65% VUG & VTV, with some VEA, VB, USMV, and VWO mixed it. The purpose of the meeting today was for me to meet the advisor and visit about significantly increasing our investment holdings with them. They have ran the existing account through Fidelity. About half-way through the meeting I am sitting there thinking what is the point in us paying them approximately 1.55% annually to invest in these ETF's? It seems I could manage my own Fidelity account investing in VUG, VTV, etc (or more likely just largely focusing on VTI) for far less than 1.55%?
Don't use options. You are basically asking for a way to trade a long term trend with minimal volatility. That can be done optimally by buying shares of a broad-based minimum volatility fund, like USMV. Options are best for short term volatility trading.
AAPL has more beta than QQQ so you are kind of contradicting with yourself. MSFT is good though (I hold a lot through USMV)
I quite like USMV and VDC at the moment. I think I might use some of the money to buy a house in the next few years so I am a little more heavily weighted in lower volatility funds. I still have about 15% in VTI though. VDC in particular performed quite well in the last recession. I also put money into i bonds because they are paying 7.12% right now and likely to go up above 9% next month.
VDC, USMV, VTI, VXUS The first two are because I think I might want to use the money to buy a home in the next 10 years so I like the low volatility.
I currently hold seven diff ETFs with a somewhat fair balance across the board with a bit heavier load on SOXX, VOO and XLV. IFRA, USMV, VXF, VYM, VOO, SOXX and XLV
Something like SPLV or USMV sounds like what you are looking for.
My advice: Use time as your hedge, not options. If you hold a diversified portfolio for 30 years without touching it, it will do fine. Heck, you can add to it by buying the dips. Hedging costs profit potential, as a necessary consequence of the way risk and reward are tied together. A hedge lowers risk, which necessarily lowers reward. If downturns and 30% drops in your portfolio cause you sleepless nights and anxiety, rotate the mix of your asset allocation to have a lower risk profile. Use more low volatility stock/funds, like USMV, use more bonds with shorter maturities, use more preferred shares, maybe get a basket of commodities ETP for inflation diversity. As a side note, I hope your CN exposure is low and you are making it lower. I don't think we've seen the worst out of CN as a sector yet.
VGK kind of proves my point about how the (real) bear resets the bull cycle. US didn't have clear leadership until the 08-09 bear ended so yes you were buying near a bull market peak. since that bear market we have been in a really long bull, US, Tech etc have led and Europe has really underperformed. It's funny how former leadership areas sometimes don't regain their old highs during the next bull... and yet the market broad index, as a whole, does get to new highs. Take a look at tech after the 2001-2 bear. The big ones that survived didn't regain old highs until a ways into the the 2009+ bull we are still in. CSCO which was a top two market cap stock and the first stock to hit a half trillion market cap ... still hasn't regained its bull market high from 2001. One way to be risk averse and still participate a bit more broadly as a core strategy is a minimum volatility index based fund. You may want to look into ACWV or USMV. best!
My taxable account at IBKR is: 30% BTAL 40% USMV 30% MTUM. BTAL has worked pretty well as a hedge this last week. BTAL didn't work earlier this year because high-beta stocks just went ballistic. So it would be best as a hedge to MTUM, the high beta fund. But back testing shows a mix of USMV gets a much lower drawdown at a higher sortino ratio. If the market goes down it should work as a hedge, kind of like long term bonds... but I suspect long term bonds are a guaranteed money loser whereas BTAL isn't a guaranteed money looser. If the market kinda trades sideways it should do OK, if we go to the moon then it will lose some money. <shrug> its all theoretical
Up to $10k per person in series I savings bonds yield 0%+inflation, redeemable at par after 1 year (minus 3 months interest if before 5 years) are a good option right now with high inflation and low yields on most bonds. For bond funds, theres: TIPS like SCHP yield -0.95%+inflation. Core bonds like AGG yield 1.73%. Short term bonds like BSV, STOT, JPST yield around 1%. For some more yield and risk you can dip down in credit quality to core-plus or multisector style bond funds. The lowest volatility dividend equity stocks (a fund like USMV) still have around 80% of the risk of IVV, so not very safe. If you want a bond-less moderate risk fund, a hedged fund like SWAN might be a possibility.
These are my lowest risk picks: MOAT, USMV.
As someone fairly new to the game. What is your opinion on super long calls on index funds? It seems as long as you hold, they climb steadily. Options only a couple dollars OTM on some less expensive funds (SPLG, ITOT, and USMV as examples) seem like as safe a bet as an OTM option can be.
Five years is not a long time for investing. There is always a real risk that the next few years will underperform the historical 10% return average. Consider lower volatility ETFs. USMV comes to mind. Because they are low beta, they will probably underperform in bull markets.
You might want to look at minimum volatility: $ACWV, $USMV as a way to derisk some of your stock investment.
USMV is designed to be low volatility
You don't predict management. You predict what upcoming products or services that will bring out the profit. If there's competition which will make less profit, then it is hard to predict. News are what those institutions make, so there are no point of entry and exit for retail using those news. That's why I don't like general, very well known companies, their growth is minimal. I personally keep thing simple, buying bunch of necessity ETFs such as USMV, VNQ, VAW, XLP, XLV, GSG for the coming 6 to 9 months because I feel those can go up 15 to 20% without much concern of competitions since everyone needs it unlike Apple or Google products or services.
Gold and commodities are not any more stable than anything else -- with everybody and their mother shilling precious metals they are getting more volatile. Commodities are less correlated to the stock market which makes them a diversification play. The most stable stocks are the ones that are the least volatile, look at a minimum volatility ETF like $USMV. They have less risk/ less reward
stocks with lower beta have less likelihood of going up or down with the market. you might want to look at a minimum volatility fund like $USMV if you want less market risk but decent potential for gain. any low beta strategy offers less market downside risk but the trade off is less market upside.
With the 10Y this high and you haven't gotten out of your over-leveraged tech companies, you are basically asking for red in your portfolio. If you haven't gotten the message from the market yet, the market has rotated out of these high beta tech companies into value. You can see that whilst the S&P has been reaching new highs, the Nasdaq and tech have been left behind. This especially seen in the FANG ETF's performance lagging behind the S&P 500. There have been huge upticks in XLP (consumer stocks) and USMV (USA Min Vol Factor ETF). The tech bubbles have already burst and fund managers have been rotating into low beta stocks and ETFs, that is why on green index days you still experience sell-offs in your stocks because people are still selling to minimize loss. The value trend will continue for the next few years, especially with the current Fed policies. There are other assets out there that will provide better returns compared to the tech run-up over the last year. Now you guys actually have to do some research to find them as they are always under everyone's radar.
I don't see the benefit of splitting it out into 8 different ETFs. Keep it simple, 90% VT, 10% BNDW until you decide what you want to do with it. Fully diversified across global stocks and global bonds, and it's cap-weighted. Breaking out separate small/mid/large cap funds, you'll have gaps where a company's too small for a mid-cap, too big for a small-cap, or the large small-caps will be weighted more heavily than some of the small large-caps. Red flags? MTUM is a momentum fund, just buying or selling because a stock has been going up/down isn't investing, it's speculating. Top holding is Tesla if that helps you decide on the quality/safety of that fund. There are a couple of min-volatility funds like SMMV USMV. IMO min vol funds aren't needed - they skew your portfolio towards value investing instead of being relatively unbiased like a total stock market fund.
Inherited a taxable account with Raymond James and the advisor wants to put me (31 M, USA) into: VOO 38% IEFA 15% IJH 11% MTUM 10% USMV 9% IJR 8% IEMG 5% SMMV 3% I told him I am okay with moderate risk, horizon is 30yrs, and I want lower expense ratios. Very passive strategy, he shouldn't touch anything. Any red flags? I like and know VOO but the other iShares I have no idea. %'s are approximated by me. Yes I know I should run from Raymond James but I'm feeling the water, I only have an IRA with a robo-advisor myself and will be a year or two before I feel confident to take control and move to Vanguard. Thanks!
So I pretty much put in a little every 3 weeks regardless of what's happening in the market and its been working out pretty well for the last few years. Currently have my money is split up between: ITOT - USMV - IEMG Am I covering the major players? Should I be looking at any different funds to plug any gaps? Goals: make money over time but not stare at the market Age: 40
When I was shopping around for ETFs, I compared all the major ones, and SPY is probably the one that had the highest 10 year return. This was just comparing different index ETFs. You can try this yourself, it's super easy. Yahoo Finance charts let you easily compare multiple tickers on the same chart and then you can zoom out to 10 years and see which one had the highest return. Of course that doesnt guarantee it will continue like that in the future. If I had to guess, although I'm not 100% sure, the reason SPY rose the most is because of its general popularity and it's low expense ratio which lets it track the S&P 500 more accurately. Although don't take my word for it I'm just guessing. You can also look at low-beta/low-volatility ETFs such as SPLV or USMV. Those fluctuate less and over time make less return than others but they are "safer" due to less fluctuations. One way of comparing performance of ETFs is the Sharpe Ratio which is the ratio of the ETFs return to its standard deviation in price. Standard deviation in price is used as a proxy for risk in this case so the ratio acts as the ratio of return to risk. Obviously youd want to maximize return for the lowest amount of risk. Low beta/low volatility ETFs such as USMV and SPLV have some of the highest Sharpe Ratios that I've calculated when shopping around. You can perform the calculation in an Excel spreadsheet as well. Just get the historical price data from yahoo finance for an ETF, download as a CSV file, then calculate the return and use the standard deviation function over the historical prices. Then calculate the Sharpe Ratio and compare them. Ultimately, what you pick depends on your own risk tolerance and investing timeframe.
Thoughts on Inverse / Downtrend ETFs? I have about $2k in ADME and recently bought $2k in NUSI. I was considering consolidating into one or the other (or another downside protection ETF like USMV). NUSI looked nice due to its monthly dividend but it's relatively new which is giving me second thoughts about how it might perform in the long term. Does anyone have suggestions for a good plan of action here? I've owned ADME for a few years and am up about 33% on it.
USMV, VPU would be my picks to round that out a bit. Never sell anything and you’ll do swimmingly.
this gives a bit more insight. Aggressive? Like to hear that. I would be buying a good amount of etfs, diversified, and let them go to work. Check the companies in $MOAT, $SVAL, $USMV, $SMH, $XLY, $SPLV - like em, buy em. Oh and fuck bonds until rate come up. It's coming.