100 Level

Gauss Portfolio Review: Risk Reduction Model Update

At the end of each month the Gauss Portfolio comes up for its ITARR review.  Over the past few days I had some concerns that one or more of the eight critical ETFs would be sold out of the Gauss.  Fortunately, this did not happen as the closing prices today showed each of the ETFs priced above their 195-Day Exponential Moving Averages.  We may find a different situation when the Maxwell is … [Read More...]

Retirement Mistake #5: Underestimating Life Expectancy

Not only are we living longer, but we are living healthier lives.  When planning for retirement, what age should one project as the end-of-life year?  When running out retirement projections using the Monte Carlo calculations within the Quantext Portfolio Planner software, I use 100 as the end-of-life year when testing the probability of running out of money.  There are many assumptions that go … [Read More...]

300 Level

What Should I Do If I Am Holding Cash?

What should I do if I am holding cash?  Is it time to move back into the market, and if so, how should I proceed?  Those are difficult questions considering the S&P 500 (VFINX) increased in value by 87.4% since January 20, 2009.  If one were to follow the Louis Rukeyser analysis, moving immediately into the market is the correct decision.  However, Rukeyser was using data … [Read More...]

Gauss Portfolio Analysis: Examining Future Projections

Photograph: Coast Guard entering Depoe Bay, Oregon Coast - USA Future portfolio projections are changing as the broad stock market continues to creep higher. With the recent interest in the Gauss Portfolio (found on itawealthmanagement.com), I will use it as an example of how Quantext Portfolio Planning (QPP) goals need to be modified. A review of the goals is found below. Take out a Platinum … [Read More...]

200 Level

Harry Browne’s Permanent Portfolio

Risk-Parity Look at Permanent Portfolio Much is written about Harry Browne's Permanent Portfolio, particularly since it held up well during the "Black Swan" markets of the early 21st century.  Below is a look at the equal allocation plan as advocated by Browne, and a Risk-Parity examination of the same four asset classes.  Both the equal allocation and Risk-Parity … [Read More...]

What ETFs To Use For Different Asset Classes

A question came up regarding what ETFs do we use for the different asset classes.  Below is a listing of the different asset classes and the primary, but not only, ETFs we use to populate the asset classes. … [Read More...]

400 Level

International ETFs and The Delta Factor

This morning I located the following article, Why I Am Buying The Pain In Spain, on Seeking Alpha, one of the top blog sites on the Internet.  In the article, author Cam Hui states his belief in mean-reversion, the exact philosophy that is the foundation of my "Delta Factor" calculations.  Using Hui's article as a backdrop, I decided to run the Delta Factor numbers on the … [Read More...]

ETFs to Purchase

As you look at the new week, here is my analysis for the seven ETFs we are using with the ITA Risk Reduction model.  Keep in mind that this study is in the early stages and will likely need to be refined as time goes on. … [Read More...]