The Perfect Portfolio for 10,000 or 10,000,000 Dollars

There is a saying which has been attributed to a fictional Chinese storyteller named Kai Lung and it goes like this, "May you live in interesting times".

Well my friends, we do live in interesting times, very interesting times. With China holding the largest share of US debt, inflation just around the corner, and no light at the end of the tunnel for the unemployed - these are interesting times.

So what's going to be the best plan of action for your money in the next three years? Is the value of your portfolio going to be cut in half, or is it going to double? I have my game plan in place, do you have yours?

I've given a lot of thought as to what's going to happen in the next three years. Specifically, what I am going to do with my own portfolio and my own money. I have scoped out several markets that I think are going to offer excellent opportunities, no matter what happens to the economy. Yes, you heard me right.  No matter what happens to the economy, I believe that this "Perfect Portfolio" will work for you in the next 36 months whether you have 10,000 or 10,000,000 million dollars.

We back tested The Perfect Portfolio using our "Trade Triangle" technology for 42 months through some of the toughest, most difficult markets the world has ever seen. I think you will be pleasantly surprised at the results.

All the best,

Adam Hewison

President of INO.com

Co-creator of MarketClub.com

55 thoughts on “The Perfect Portfolio for 10,000 or 10,000,000 Dollars

  1. Adam

    Just new to Market Club and have been trying to come up with a system for trading. Do you have any suggestions for the setting of "stop loss" orders? I have set a few and got stopped out on daily lows. Obviously I was too tight. Are there any "rules of thumb"?

    Regards

    Richard

  2. Please explain further how you used SAR with trade triangles. Did you use the common 0.02,0.2 setting? Did you use SAR to fine-tune an entry?

    Thanks

    bob

    1. Bob,

      Thank you for your feedback.

      I did not use the SAR to fine tune entry points in the perfect portfolio. We used the acronym SAR to show that we were reversing positions from long to short and from short to long.

      The only tools that we used in the perfect portfolio are our monthly trade triangles.

      All the best,
      Adam

  3. Perhaps you would explain further on how you used SAR with Trade Triangles. This video really got my attention.

    Did you use the usual SAR setting ( 0.02, o.2) or some other? Did you use SAR say using a weekly chart to fine-tune the actual trade setup.

    Thanks,

    Bob

  4. Brian,

    Thank you for your feedback.

    Please take the time to shoot us an e-mail at support@ino.com showing us how you came up with your numbers.

    All the best,
    Adam

    PS Were you using futures or spot data for gold?

    1. Hey Adam,

      I'll send you details of my results directly. I was using the GLD ETF as you demonstrated in the video.

      Thanks,

      Brian

  5. Hello Adam,

    I had difficulty recreating your results with the gold trade. My result came closer to 3% gain versus your 56.96% gain. I used the monthly trade triangles for specific entry and exits. What did I miss? Could you elaborate on the specific entries and exits so I can check my math? 🙂

    Thanks,

    Brian

  6. Nour,

    The monthly Triangles are part of the MarketClub service. If you are not a member try a 30 Day risk free trial and see how it works. It is very easy to see how it works in the real world.

    All the best,
    Adam

  7. Can you explain how you arrive at 3 out of 7 winners on the GLD charts? It seems to me that you pretty much have only 1 demonstrated winner that I can see. The trades as far as I can tell, from the video are (all prices estimated by eye):
    Short @ 58 (unknown if it was profitable)
    Long @ 65 (which eventually won)
    short @ 84 (which eventually lost)
    long @ 95 (which lost)
    short @ 82 (which lost)
    long @ 91 (still open)

    This means the only way we could've had 3/7 is if you count the original trade, as well as the still open trade as winners and as profitable. Is that how youv'e done it? And if so, what was the entry prior to the first short? (I guess looking at this this must be what you did! 😉 )

    1. Walter,

      Thank you for your feedback and thanks for paying such close attention.

      Your last paragraph describes exactly how we counted the trades.

      All the best,
      Adam

  8. MWM,

    We are unable to recommend a brokerage company to you to trade ETFs as that would constitute an endorsement of that brokerage company. We have been approached many times in the past by brokerage companies to recommend their service to our thousands of users. Some of the offers were financially attractive. We have always declined for the reason above.

    We enjoy the fact that we are independent.

    Good luck,
    Adam

  9. Adam, if the Perfect Portfolio is this good, why not use the same trading strategy but with more different pots, more issues? Silver (SLV), Basic Materials, Tech, Financials? They also can get hot and have long solid trends, and substantial volumes, no?

    1. Tom,

      Thanks for your feedback. Not a problem adding more markets, diversification is good.

      The more markets you track, the more work it is for you to keep track of them.

      Every success,
      Adam

  10. If cannot find a "short etf" to your liking, you're not alone. I'm finding that their volumes are smaller, probably because folks don't know them or because they do get some bad publicity. That smaller volume worries me little also, it invites excess volatility. And so in some cases I will simply be "out" instead of "reversed," unless/until I feel/see there really is a solid trend. I'd love to trust this Perfect Portfolio and keep life so simple, but I'm not yet going to trust ALL my IRA with it. Maybe half.

  11. Hi Adam,

    I had one more question.

    You suggest we use only the Monthly TT. Won't results be better if we entered the trade when all 2 TT are green and get out when the weekly goes red and then short when monthly goes red. I see that following just the monthly gives delayed signals specially when we go long and it could be filtered using weekly TT. Your thoughts?

    Also you suggest that when trading forex we use the weekly for trend and daily for entry/exit. Noe the FOrex ETF follow the currencies very closely then why not use the weekly-daily method with the ETFs. Is it because the former is currency pair and the ETF just follows one currency in the pair.

    Thanks,
    Trikaal

    1. Trikaal,

      Thanks for your feedback.

      You may indeed improve results using the methods we describe for members.

      The purpose of the Perfect Portfolio is to show just how simple it is to approach and trade the 4 markets we tracked for 42 months.

      The ETF, FXE tracks the EURO vs the US Dollar. That is the pair you are tracking with the ETF. We use the Monthly/weekly approach for this ETF when we describe it in our other videos.

      Again, we showcased this strategy in the Perfect Portfolio to show that you do not have to be an economist or a math major to make money in the market. You just need a focused game plan.

      All the best,
      Adam

  12. Great concept! Was wondering if any members used trailing stops (up and down) to validate or anticipate triangle reverses??

  13. Should I not ever worry about paying the higher taxes on my gains since I will no longer be buying and holding for the required year and a day? Also, who can recommend a good online broker which gives a decent percentage for cash in the account and also I am not a day trader, I will be doing the perfect portfolio with monthly triangles. Thanks!!

  14. Great video Adam.

    For the crude oil, it may be safer to use USL instead of USO to reduce the effects of contango.

  15. Anybody have ideas on how you can get started with this system? I mean the last trade triangle was weeks or months ago in most cases, and you might be headed for a quick loss if you just jump.

    Maybe putting half your money in now, and putting it all in at the next change of direction?

    1. Ktb,

      Good question.

      The Perfect Portfolio is a long term strategy. The sooner you get in the sooner you can be following the program.

      All the best,
      Adam

  16. Thanks Adam for reducing my stress levels.
    This concept is so simple to understand I'm going to re-balance to include these 4 ETF stop and reverse as part of my portfolio.
    Q: would it profit more from this concept to use leveraged ETF's? I found SSO & SDS for the S&P but not for the Euro, Oil & Gold. Thanks Paul

    1. Paul,

      Once you introduce leverage you create an imbalance in the portfolio.

      I like keeping things simple so I am sticking to what works.

      All the best,

      Adam

  17. I found this video very interesting, I have been thinking very seriously about joining marketclub but my account not yet that large. I very much like the idea of a patient a long-term approach that this method preaches.
    If one were to start with a smaller account (say $5000) would it still be cost effective to use this approach? The difficulty is that the subscription rate for the service becomes a larger amount of total cost. I would have to make at least $500 the first year on my account just to break even.

    Thanks.

  18. thanks for the video, my understanding is that, "Monthly" is for trend and "Weekly" is for timing, so I am wondering if we use "Weekly" triangle with this SAR trading instead of "Monthly", will that get us better result?

    1. Charlie,

      Thanks for your feedback.

      You do not use the weekly Triangles in the Perfect Portfolio.

      You can run the numbers and see if the weekly numbers are better. For some traders the weekly Triangles will add more excitement and more brokerage fees.

      All the best ,
      Adam

  19. Having GOOGLED "short ETF's" I found the following:

    Short Euro ETF = EUO
    Short Oil ETF = DNO
    Short Gold ETF = GLL
    Short S&P ETF = SH

    DUG is one that appears to be popular but is and Oil & Gas ETF. Hope this helps.

  20. Adam, I am a BRAND NEW member and have been following along on MARKETCLUB for a few months now. Enjoying your whiteboard sessions and video blog entries. I finally pulled the trigger and took you up on the 30 day trial offer.

    side note: if it took me 3 months to pull the trigger on a free offer what does that tell you about my trading style!

    I have done very little trading in the past, usually based on a friends recommendation or on (gulp!) gut feel - with as you might expect very mixed results. I am disillusioned with the results I have obtained over the past 15 years in my retirement account using B&H MUTUAL FUND investments recommended by my financial adviser - I may as well have kept my money in a sock under my bed.

    If I get what you are saying you would use MONTHLY TT to signal entry and exit positions and then use Inverse ETFs to keep your dollars working for you in down markets. I am interested.

    Q1: this strategy of using long signals seems like it would have worked very well in the fall 2008 downturn and the summer 2009 rally. What about longer term or sideways markets? It would be real interesting to see CAGR backtest results on this strategy on say 10, 20, 30 year vs B&H. Is there a way to do this using any of the MARKETCLUB tools?

    Q2. What would be in your opinion the best ETFs to short USO, GLD and FXE?

    Thanks for all your expert advice (and the 30 day trial). No trades yet, but looking for an opportunity to test some of your recommendations soon.

    Tim

    1. Tim,

      Thanks for joining MarketClub. One of our main goals at the club is to empower you with the knowledge that you can do this yourself.

      The Perfect Portfolio is an example of that. We have chosen 4 key markets that have historically had big moves both on the upside and the downside.

      It is possible to short the USO,GLD and FXE ETFs. You do not need to look for an inverse. If you are trading in your IRA there is a problem shorting stocks which presents a problem in using this strategy.

      Keep building your confidence and tracking the markets. It is one of the best ways to learn how to trade successfully.

      All the best,
      Adam

  21. Adam:
    Excellent video and I'm in the process of reassessing my Equities portfolio to take advantage of this strategy. I agree with the "set it and forget it", as an "investment" strategy it hits all bases. I DO take exception with your "... no light at the end of the tunnel for the unemployed...". I've been unemployed for (1) year and started trading commodity futures in April getting my feet wet. I re-upped my MarketClub subscription in Sep and am making progress, your charts are incredible. Thank you.

    1. Lee,

      Absolutely no disrespect to anyone who is out of work. You only have to look back on the past 30 years to see why we have no jobs left in America.

      Every success to you.

      Adam

  22. Adam,

    I like the plan. From here the same questions always arise.

    1) When to enter - now or the next signal?

    2) How much of the total pot to invest. If one is in mid-50s is this a good allocation for the whole pot or does there still need to be a big % in cash?

    BG

    1. BG,

      There are no easy ways to answer either of your questions. All I can say is this, If you follow the 4 markets we outlined in the Perfect Portfolio you are being proactive and protecting your money as you have a game plan for the future.

      There are no guarantees in life.

      All the best,
      Adam

  23. I think there might be another problem besides going short, which is do-able with ETF's.

    What about the 12, 24 and 36 month returns. If the market hadn't crashed this strategy would have had a terrible return over normal measurement periods.

    1. Caroline,

      Thank you for your feedback.

      The worst performing market was the SPY which crashed. Take that out and divide your money in thirds and the porfolio would have performed in all three time frames.

      You cannot just look at one market, that defeats the whole purpose. Diversification and discipline is what makes for successful traders.

      All the best,
      Adam

  24. Jerome,

    Yes, I understand you cannot go short with an IRA account. There are some ETF's that allow you to go a long. For example with SPY the opposite to that is the ETF SH. This allows you to go long and be short the S&P 500.

    There may be other ETF's out there that allow you to go short in your IRA account and if one of our readers to this blog knows of any please let Jerome know about them.

    Lastly, it's such good returns it may be worthwhile just having a trading account for this portfolio.

    All the best,
    Adam

  25. Sounds good. Only problem is my money is in an IRA which I can't short.
    So what do I do for the short trades.

    JERRY

  26. Thanks for the "Perfect Portfolio" video, Adam.
    The only drawback as I see it is the boredom factor. Making 1 or 2 trades a month just won't cut it for me. I need to be more active. Also you didn't mention what could be done with the cash over extended red triangle periods.

    1. Larry,

      I can understand the boredom factor but hey, it makes money that's never been boring in my mind. It's like the set it and forget it strategy.

      Not sure you got the concept of SAR, stop and reverse. When a red triangle comes in you go short that market. You are always in the market that are no timeouts.

      Thanks for your feedback and all the best.
      Adam

      1. Thanks Adam.
        In fact the last four trades for the funds are: 07 May, 30 Jan, 20 May, 04 May 2009. So you could go months without a trade.This may be hard to take pschologicaly?

        1. MJOL,

          Thanks for your feedback.

          One of the keys to an approach like this is to get involved with all 4 markets asap. The simplest way to do this is just put the positions on. That way you do not have to over think or kick yourself if the markets continue there trends.

          All the best,

          Adam

    1. Vince,

      Yes, I am aware that you cannot go short in an IRA account. You may want to read what I mentioned to Jerome in this thread about that.

      All the best,
      Adam

    2. Vince,

      You can rollover an IRA and have it at Millenium
      Trust so that you can trade oil, gold...etc.
      It's the only way to play futures and forex in
      real time without counting on playing a GLD or
      inverse. Granted..there is more risk...but I think
      the rewards are greater.

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