The $80,000 Good Value Test

by | Dec 10, 2015 | Archives

Find the least expensive way to invest in good value.  At our October 2015 Value Investing Seminar I outlined a portfolio of 17 good value, Country ETFs.   This portfolio was created based on my 50 years of experience and research from several of the sharpest, good value mathematicians.

According to the analysis I put together, the equally-weighted combination of these ETFs offers one of the easiest ways to attain the highest expectation of long-term risk-adjusted performance.  In fact with time above average performance is almost guaranteed.

The chart below, by Keppler Asset Management shows how after just 18 months this type of portfolio has a 75% chance to outperform the Morgan Stanley MSCI World Index of shares.  After three years the odds are 85% that this portfolio will outperform the MSCI World Index and after eight years the odds rise to 95%.

keppler profit probablility

Click on chart to enlarge.

The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.

I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.  You can duplicate this test.  The cost is $80,000. Or you can see the results of my $80,000 test as a subscriber to the Purposeful investing Course (Pi).  The cost then is nothing (except the subscription to Pi).

The Test for Low Cost Trading

Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy.  A search for an optimal way to buy and hold boiled down to two methods.  One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal.  The other approach was to use a community bank in Smalltown USA.  The small town bank that I use looks after my 401K trust account and their service is first class.  The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved.  There are no call centers and the bank and the person looking after my account is just around the corner.

I created a test to see which offered the least expensive service.

Working with my banker in Smalltown USA,  I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.

I set up the order for the 17 country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system.  Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.

I am sharing the results of this test with Pi subscribers this week and want to offer you a chance to subscribe to Pi before I release these results.  The savings you can gain on any purchase of 17 shares has the potential to be more than the cost of the Pi subscription.  Learn below how to join us with Pi.

good value portfolio test

Regardless of whether you subscribe and review the test, here is the portfolio that I have invested in for your review.

Gary

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