ETFalpha sends signals on six ETFs and, to take an example, if you have $120,000 to invest, the most diversified and the least risky way to invest using ETFalpha is to invest $20,000 in each ETF that comes up as a Buy.
The ETFalpha Users’ Manual describes this in full detail.
But suppose you do not want to invest in Emerging Markets and Commodities when they come up, and just want to invest in US stocks, Developed countries’ stocks, US real estate and US bonds. Then you should look to invest $30,000 in each of these 4 ETFs when it comes up as a Buy.
Some subscribers, we know, just want to invest in the US. Three of the ETFs we use invest only in the US. That means these subscribers will invest $40,000 in the US stocks, US real estate and US bonds ETFs when any of them comes up as a Buy.
At an extreme, you can just invest in the US stock ETF when it comes up, and ignore all the rest. The US stocks ETFs itself is widely diversified with around 1,000 stocks. Although you can choose just this ETF and follow its signals, we recommend against ever putting more than a moderate amount of your investible capital in any one security.
ETFalpha is flexible and entirely under your control so you can use it as you see fit.
ETFalpha gives you control in two ways: first, because it is flexible and you can use it in the various ways described here; second, because your money stays in your account and we never ask you to send it to us.
• leverage your investment by borrowing – even for experienced investors, we recommend you never borrow more than the amount of own capital you have for investment;
• use bull and double bull ETFs instead of those used by ETFalpha when the relevant market comes up as a Buy;
• use call options and other option strategies on the markets which are indicated by ETFalpha.
Such strategies may increase returns but will considerably increase your risk and may lead to your losing all your money. Such strategies should only be used by experienced and knowledgeable investors or those getting advice from a suitably qualified and licensed professional.
Members of ETFalpha do not need to resort to such high-risk strategies – please see our Performance.