Established User Rebalance Tutorial

Solution

NOTE: This Tutorial is for Established Users who want to streamline their trade process. If you are a NEW USER, please see this Tutorial for placing your first ETF trades using the ETFOptimize system.

Let’s pretend this is midday on Monday, March 15, 2020, and you decide to update your investments to the latest ETFOptimize recommendations. You already have a full portfolio of trades. And just so we can show you the easiest way to make this process go quickly, we'll base it on our largest, most diversified portfolio, the ULTIMATE 6-Model Combo (9 ETF) Strategy.

STEP 1) You'll log into your account and click the link from the Subscriber’s Menu to go to your Premium Strategy. The first thing you should look at is the "Status" table, which is the first table presented on the Strategy Update page.

On Monday, March 15, 2020 (the updates are posted by midday on Sunday) had this information about trades for the ULTIMATE COMBO-6 Strategy:

If it says ’No Trades,’ your work is done. You can go back to sleep…

STEP 2) If the first table says you have trades, then the second step is to look at the second table on the page, the 'Most Recent Changes' table. Here we find out what trades are being referenced above.

We will assume that you already have been using ETFOptimize and you own all the positions from last week. For first-time users, there is a Tutorial for making your first trades at this link.

For established ETFOptimize users, you’ll refer to the second table on the page, 'Most Recent Changes.' The table says that there are four transactions on Monday, two Sales and two Buys (they are identified using green and red lettering in the ’Type' column:

You see the first thing you need to do at midday on Monday is to sell both BIL and SHY from your portfolio (they are marked SELL in red). That’s easy, you just hit the 'sell' button for each of these ETFs in your brokerage account! You don’t need to pay attention to anything else – those ETFs are gone.

STEP 3) You see from the 'Recent Changes' chart above that we are purchasing XLV and XLP this week.

To find out how much you should buy of XLV and XLP, you'll reference the third table, 'Current Holdings:'

The second labeled column in the 'Current Holdings' table shows 'Weight.' You see that you should use 6.33% of your portfolio assets to buy XLP and 9.79% of your assets to buy XLV. So we'll do the following two calculations for the first listed position to buy, XLP:

STEP 4a) For an example $500,000 portfolio, Buy $31,650 ($500k x 6.33%) or 478 shares (at $66.15 per share) of XLP.

And lastly, we'll do two calculations to buy XLV:

STEP 4b) For a $500,000 portfolio, Buy $48,950 ($500k x 9.79%) or 427 shares (at $114.60 per share) of XLV.

VOILA! You are done for the week!

After you have initially established your portfolio, you don’t need to worry about the other ETFs. They stay just the way they are unless they are listed in 'Most Recent Changes.' You just need to sell the listed ETFs and buy the new ETFs in the amount specified and don’t worry about the other positions.

After you’ve done it a few times, it only takes about 10 minutes a week to complete this process (including double-checking your figures)!

If you have any questions on current holdings or any other issues, please contact us with a support ticket at https://etfoptimize.com/support. We will respond within 24 hours, and usually much sooner.

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