Specifically, we expect emerging markets to be the real engine of growth next year; emerging market GDP is projected to grow by more than 7 percent during 2012 in contrast to 1.5 percent growth in GDP for the more advanced economies.

That should be a favorable environment for our Global ETF Profits Model Portfolio, which currently emphasizes emerging market equities.

But we understand that every investor has different goals and different risk tolerances.

To make the most effective use of our overall Model Portfolio, you should first understand what differentiates its three sub-Portfolios.

Our Short-Term Opportunities Portfolio represents our highest-risk recommendations. This Portfolio is geared toward capitalizing on short-term market trends, and will produce the greatest relative volatility over the average holding period of its positions. We expect to hold these positions between six months and one year.

Our Growth Portfolio seeks to tap into the long-term investment trends driving global markets, such as infrastructure build-out in the emerging markets and the rise of a global middle class. These positions shouldn’t be as volatile as our Short-Term Opportunities recommendations, and we expect to hold them for one year or longer.

Finally, our Income & Hedges Portfolio represents our least risky positions, with an emphasis on current income and safety.

For aggressive investors with long-term investment horizons, we suggest dividing your overall portfolio among our three Portfolios by using the following allocations (with recommended securities given equal weighting within each allocation):

Growth Portfolio: 70 Percent

Income & Hedges Portfolio: 15 Percent

Short-Term Opportunities Portfolio: 15 Percent

For those investors who consider themselves as having a moderate risk tolerance, we suggest a heavier allocation to our Income & Hedges Portfolio and a lower allocation to our Short-Term Opportunities plays. We suggest dividing your overall portfolio among our three Portfolios by using the following allocations (with recommended securities given equal weighting within each allocation):

Growth Portfolio: 65 Percent

Income & Hedges Portfolio: 30 Percent

Short-Term Opportunities Portfolio: 5 Percent

Finally, conservative investors should minimize risk by dividing assets equally between our Income & Hedges and Growth Portfolios. This approach emphasizes the role of income in a total return portfolio while growing assets through capital gains. Any allocation to Short-Term Opportunities would be entirely discretionary, depending upon whether or not you have any “mad money” with which to play.

Growth Portfolio: 50 Percent

Income & Hedges Portfolio: 50 Percent

For performance tracking purposes, however, please note our overall Model Portfolio is constructed by assigning an equal weighting to each of our recommendations. This approach roughly equates to the allocation for aggressive investors that was suggested earlier.

The Global ETF Profits Way

As a reminder, the Global ETF Profits Model Portfolio is divided into three sections: Growth, Income & Hedges (I&H) and Short-Term Opportunities.

The Model Portfolio provides the full spectrum of strategic approaches to investing by recommending growth, income and hedging strategies, as well as shorter-term tactical opportunities. Additionally, the use of exchange-traded funds (ETF) can capitalize on trends in specific sectors without incurring the risk of selecting the wrong stocks in those sectors.

The Growth and I&H Portfolios are appropriate starting points for investors seeking to establish positions for the long term. The Short-Term Opportunities Portfolio is best suited for those investors who have a greater tolerance for risk. We’ll adjust the ETFs in the overall Model Portfolio on an ongoing basis to reflect investment objectives. Our recommendations are sorted in descending order of preference, starting with our favorite pick at the top of each section.

It’s important to buy a cross-section of recommendations–taking into account, of course, your objectives and risk tolerance–in order to gain broad exposure to the investment themes we’ve highlighted, as well as to maintain proper diversification.