ABSTRACT
Next, we collect individual returns into a portfolio, which is a weighted set of asset returns. Accordingly, the first thing we need to do is assign a weight to each asset. Recall that our portfolio will have the following asset mix:
+ SPY (S&P500 ETF) weighted 25% + EFA (a non-US equities ETF) weighted 25% + IJS (a small-cap value ETF) weighted 20% + EEM (an emerging-markets ETF) weighted 20% + AGG (a bond ETF) weighted 10%
We need to create a weights vector that aligns with those allocations.
