Our main portfolio should be by default diversified and low volatility, basically buy-and-hold type.
However we may get long drawdown periods in the main portfolio.
To fight the drawdown we use further diversification into yet more markets and cache assets. However all assets are correlated to some extent.
To fight this correlation we can use more aggressive timing on long dual momentum portfolio:
VTI/VEU Equity origin (US/EU)
HYG/CIU Credit risk (Long/short term)
VNQ/REM REIT risk (New/established assets )
TLT/GLD Economic risk
A stronger and more proactive method is aggressively timing and using leveraged funds for
Equity:
TQQQ/SQQQ (nasdaq stocks – growth)
DDM/DXD (dow stocks – large cap value)
TNA/TZA (russel 2000 stock – small cap)
EDC/EDZ (emerging markets)
VXX/XIV (volatility)
Other:
UGLD/DGLD (gold prices)
UUPT/UDNT (dollar prices)
JNK/SJB (junk bonds)
TLT/TAPR (gov bonds)
SRS/URE (real estate)
Notice that all timing strategies are more risky than buy-and-hold, use larger fees and provide lower returns in bull markets.
Therefore we are uncertain regarding which signals justify use the inverse/leveraged funds – more testing is due, with respect to main portfolio [correlations].