Growth Objective
A typical growth portfolio (designed to beat broad market indexes like the S&P 500 over time through our Upgrading strategy, but with similar risk) is composed primarily of core mutual funds and ETFs. We generally hold between seven and twenty core funds in a growth portfolio, but individual investors can get away with as few as five and be reasonably diversified. We model our core holdings as equally weighted, but tend to take larger positions in larger funds that are less restrictive or ETFs that we believe trade with sufficient liquidity. We sometimes take small positions in highly ranked funds that are harder to trade (either due to size or restrictions) or we skip these funds in favor of other highly ranked candidates. We take smaller positions in more speculative funds and restrict total exposure to speculative funds to less than 1/3 of a growth portfolio. In total, our typical growth portfolio will hold at least 30 mutual funds or ETFs, providing broad diversification.
Summary: A growth portfolio holds larger positions in diversified core mutual funds and ETFs and limits exposure to speculative funds.
