100 Level

Index Investing Puzzles

Check out this interesting article titled, "The Weighting Game, and Other Puzzles of Indexing."  Here are the opening two paragraphs. "If we had hosted a panel discussion about active and passive investing 15 years ago, we would have titled it: "Indexing, Does It Make Sense, and If So, Why?" The burden of proof would have lain at the feet of the indexers. That's … [Read More...]

The Do-It-Yourself Decision

Do you manage your own money or do you seek help from a professional advisor?  Authors Goldie and Murray tilt toward professional management.  They recommend investors who are ill equipped or not interested in managing their own portfolio to use a fee-only advisor rather than a broker. "A broker is working for his firm. An independent fee-only advisor is working for … [Read More...]

300 Level

QPP Analysis of Curie Portfolio

Curie Review: Part II Does the Curie need tweaking?  Is there a match between any of the under-target asset classes and ETFs that might be priced to buy? Taking the current ETFs and stocks held within the Curie, I did a copy and past of both the holdings and percentages and ran the following QPP analysis on the Curie.  It has been over three months since I last analyzed the Curie and it … [Read More...]

Supercharging The Swensen Six Portfolio By Adding Three Stocks And Two More ETFs

A reader of ITA suggested adding three dividend stocks (T, JNJ, & PG) to see how it might enhance the "Swensen Six" portfolio.  I made those additions, changed the allocation between TLT and TIP, and added international real estate (RWX) and commodities (DBC) to the portfolio.  These changes enhanced the projections for the "Swensen Six" in all the major metrics. … [Read More...]

200 Level

Optimizing The Swensen Six Portfolio

The prior blog post shows what happens when no constraints are placed on an optimized portfolio.  To follow up on the Swensen Six post, assume we begin with the asset allocation plan recommended by Swensen and then optimize the six ETFs using reasonable constraints.  The following efficient frontier graph show the Swensen allocation (diamond dot) falling well short of the optimized portfolio (red … [Read More...]

Retirement Planning Mistake #2

As a young boy my parents read to me every night and Aesop's fables were frequently on the menu.  I still recall the ant and grasshopper story where the ant was busy in the summer preparing for the winter while the grasshopper wasted time foolishly.  The picture from the fable that still lingers is that of a frozen grasshopper the following winter.  That story is fundamental to The Golden Rule of … [Read More...]

400 Level

What Is A Good Sortino Ratio?

Seeking a Good Sortino Ratio A reader of ITA Wealth Management was seeking an answer to the question, what is a good Sortino Ratio?  The simple and quick answer is - anything above zero.  Check this definition of the SR.  While the equation is quite simple, the difficulty comes in calculating the denominator. SR = (P - T)/DR where P is the portfolio return T is a portfolio … [Read More...]

Keeping It Simple With An Global Nine ETF Portfolio

A portfolio does not need to be complicated to be global in its structure.  Nor does it need to be all that complex to bring success to the investor.  The following portfolio is simple and stands a greater chance of success if one employs the Momentum-Optimization Model (MOM) as explained below. This material is not available for publication elsewhere on the Internet. … [Read More...]