My Retirement Portfolio Strategy: Taming Volatility with SPMO and SCHD
Lately, I’ve been running some code to backtest a variety of asset allocation strategies for my family’s future. When you're managing the household finances and eyeing retirement, simply relying on fixed-interest annuities just doesn't cut it anymore. Historical data over the last 50 years shows us that inflation averages around 3.5% annually. If your returns aren't beating that, you are quietly losing your purchasing power every single year.
While broad-market ETFs like VOO are fantastic for stability and tracking the market, I've been heavily researching momentum-driven ETFs. SPMO is a great example. It automatically rotates into S&P 500 stocks that are on an upward medium-term trend. The fee is incredibly low at just 0.1%, and during a bull market, it consistently outperforms VOO. The downside? When the market drops, it drops hard.
But this is where the magic of backtesting and asset allocation comes in. To control SPMO’s heavy volatility, I looked into pairing it exactly 1:1 with SCHD. SCHD pays a solid dividend of about 3% annually, meaning you get a steady 0.25% monthly cash flow. If you consistently dollar-cost average into this 1:1 ratio over the long haul, you fundamentally change the risk profile of your portfolio. My backtests show that during a market crash, this combination limits the Maximum Drawdown (MDD) to just -9.8%. It gives you the aggressive growth of SPMO while SCHD anchors the ship and provides dividends to accumulate more shares over time.
I strongly believe that learning how to actively manage and embrace volatility, rather than running away from it, is the only real way to secure a stable retirement nest egg. I've documented a lot of these thoughts and built some tools to help visualize this. Feel free to check out my posts below to see the numbers for yourself and find a strategy that fits your own risk tolerance.
Here is a useful web-based investment calculator I built to help you run your own portfolio backtest simulations and project your future returns.
https://bomspring.com/invest-calculator/
Understanding Web3 regulations is crucial for decentralized social platforms, and this article explains how the Clarity Act impacts the Hive ecosystem.
https://bomspring.com/clarity-act-hive/
If you run into coding issues while building your own tools, I put together a quick technical fix guide for STRL errors.
https://bomspring.com/strl-fix/
Knowing global economic trends is essential, and this guide shows you how to safely allocate assets to protect your retirement funds from major drawdowns.
https://bomspring.com/global-economic-trends-that-portfolio-investors-must-know-and-asset-allocation-know-how-to-safely-protect-your-retirement-funds/
For those investing globally, this is a step-by-step guide on how to buy Korean stock ETFs using the Interactive Brokers platform.
https://bomspring.com/ibkr-how-to-buy-korean-stock-etf/
This detailed strategy breakdown proves how you can effectively limit your Maximum Drawdown (MDD) to around 15% for a safer retirement portfolio.
https://bomspring.com/how-to-limit-max-draw-down-mdd-15-for-retirement-portfolio/
Take a look at these backtest results that demonstrate how mechanical rebalancing during a market crash can drastically improve your portfolio's recovery rate.
https://bomspring.com/how-to-rebalance-in-the-market-crash-backtest-result/