Middleton Updates ETF Portfolio

Tim Middleton has updated his ETF portfolio for 2007. I think he generally has some good ideas; he also keeps an all-ETF portfolio.

While I don't strictly follow Middleton's portfolio, he sort of follows the same general principle I do. Set up the core of your portfolio (whatever you think that should be) and then add pieces to that. For instance, Middleton often keeps around 25% of his portfolio in large cap U.S. stocks and somewhere between 15% and 20% in foreign stocks, then gooses that by putting 5% to 10% of the portfolio in other sectors like tech or real estate.

He's cutting part of the S&P 500 portion of his portfolio (SPY) and moving it into a newish FTSE RAFI US 1000 index from Powershares (PRF). This is an index based on technicals rather than cap weight, as the S&P 500 is.

He's also trimming the portion invested in the Russell 2000 (IWM) and real estate (ICF). Makes sense; those 2 sectors have been on a huge roll for the last 3 years and therefore those 2 portions of his portfolio have gotten far too large. He's moving some of that into international stocks (EFA).

Interesting stuff and again, a good strategy. Set up the core of the portfolio, and add pieces to that.