The ability for professional money managers to regularly outperform the S&P 500—or any appropriate Index to match the given portfolio—is fraught with one inalienable fact: Fees will inevitably prohibit any manager, no matter how clever, to generally out-perform the benchmark.

Warren Buffet recently excoriated the hedge fund industry as virtual highway robbers charging “borderline obscenely high” fees on their under-performing assets. Buffet’s 2021 – 2025 annual letters to shareholders recommend an Index S&P 500 holding as core to any sound investment strategy.*

Study after study shows that over 90% of professional money managers under-perform their respective benchmark, and this number approaches 98% over a ten year or greater time period. Transaction costs and management fees aren’t the only reasons for this, but they are a large component of this fact, to be sure.**

The Self-Driving Portfolio: Seven (7) Exchange-Traded Funds, and the cash money market fund:  A passive, all-Index, Exchange-Traded Fund (“ETF”) only index portfolio which utilizes low turnover and covered-call option writing to meet and/or beat the market. The low-cost, all Index ETF and covered-call option portfolio strategy designed by Cáritas Advisors, will diversify away company specific risk, mitigate downside further than owning the ETFs outright, and index your assets through Vanguard, Schwab, iShares, and SPDRS, unique to your risk tolerance. The seven ETFs are tailored to your risk appetite and allocated to percentages appropriate to your taste, from 100% equity to 100% cash, and all varieties in between, employing all asset classes including real estate, precious metals, fixed income, cryptocurrency, etc.

You no longer need to assess how your assets are performing, in reality, because you won the market, and will always meet, beat, or be very close (at least) to the benchmark. You can finally enjoy life, focus on charitable endeavors if you wish, sleep soundly at night, and care for more meaningful aspects of your day-to-day regimen. Your “market worry” is relieved, and your stress over hiring and firing money managers is also removed from the investment equation.

Rather than trying to outperform the market, the Self-Driving Portfolio “meets” the market, re-balanced every three to six months, with strategic hedging through covered-call option writing, which mitigates downside risk and provides added income and greater returns of up to 2 – 4% per year (versus a portfolio which does not apply these options strategies).

**Source: 1) May 13, 2017: Mark Hilbert, Financial Columnist and Newsletter writer: MarketWatch operates a financial information website that provides business news, analysis, and stock market data. It is a subsidiary of Dow Jones & Company, a property of News Corp, which also owns The Wall Street Journal; 2) CNBC, “Bad Times For Active Managers: Almost None Beat The Market Over Any Five-Year Period.” June 28, 2017. *Source: Warren E. Buffet’s “Letter To Shareholders,” Feb 24, 2018.