eToro-ing the world's largest Hedge Fund: Part 2 - Modifcations and Expression on eToro

1:14 AM

For those of you who prefer videos, i have done a series on my YouTube channel here (insert Link)

This is not supposed to be detailed instructional into All-Weather, it is too complex for me to describe here and my YouTube videos but i hope it is general enough for my copiers so you do not need a finance degree to understand.

I will likely do a Udemy course to describe the methods in more details, but this is a general overview.
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My replication on eToro is probably a poor way of doing it, but it is what we have as certain expressions via certain instruments are just not available.

If you were to follow what was described in Tony Robbins book, Intermediate Government bonds are not available via eToro.

Instead i can only keep the spirit of the All-Weather.

Modifications
http://2.bp.blogspot.com/-cBxzwNheouM/UAiYQfq0ZoI/AAAAAAAAAE4/1C6ciaFAolc/s1600/car+modification1.jpg

I have a liquidity preference and i believe CFDs to be more liquid, i may be wrong here, but it is my belief for now.

Risk parity will change consistently and i have adopted the volatility per day for the last 12 years as a starting point. But risk allocation will be re-balanced and changed depending on my market outlook.

Also in my study of reflexivity and the self-reinforcing cycles, i have added a super simple technical analysis system to try and direct our allocations towards long term self-reinforcing trends. The 200 Simple Moving Average.

Because we are not dealing with currencies, i imagine this to work slightly better in the instruments expressed.

Instruments used
As mentioned above, i do not have access to all the instruments in question via the platform so some improvisation was done.

For instance, the TLT is the long term treasury ETF.

The corporate bond index includes a broad range of duration, because our expression of this requires short & medium term bonds as well as corporate credit, i have to take a short position on the TLT to remove large effects of long term treasuries within the corporate ETF.


This is not ideal, but it is the best expression that we have.

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