100 Level

A Third Investing Path: Mosaic Investing

We hear and read about active and passive investing, and which style is most beneficial to the majority of investors.  There is a third path which is a combination of both the active and passive styles and I call it Mosaic Investing.  Mosaic Investing, as I use the term, is where one constructs the majority of the portfolio around index vehicles such as non-managed index ETFs, and then adds a few … [Read More...]

Rebalancing Portfolio: Blending Dashboard and Optimizer

Now that an optimizing tool is available, how does one rebalance a portfolio by combining the output of an optimizer with the Dashboard guidelines?  The larger topic is one of asset allocation so I will start with the following Dashboard that defines an asset allocation plan. Dashboard:  Assume the following Dashboard lays out the Strategic Asset Allocation plan for a portfolio.  Only pay … [Read More...]

300 Level

Are Optimizers Anything But Error Maximizers?

Mean-Variance Optimization "Mean-variance optimization presents an illusion of precision that is seductive but generally fallacious and even dangerous."  So writes Richard O. Michaud in his book, Efficient Asset Management: A Practical Guide to Stock Portfolio Optimization and Asset Allocation.  Harold R. Evensky provides this MVO warning.  "In spite of my strong defense of Markowitz's … [Read More...]

Swensen Portfolio Plus Dividend ETF VIG

As suggested by one reader, I removed the individual stocks from the Swensen-Six Portfolio and added VIG, a dividend oriented ETF.  Below is the Quantext Portfolio Planner (QPP) analysis, correlation matrix, and "Delta Factor" projections when using five years of historical data.  One big advantage of using VIG instead of several individual stocks is one of simplicity.  … [Read More...]

200 Level

QPP Analysis of Swensen-Faber Merged Portfolio

Merging ideas from the "Swensen Six" and "Faber Ten" portfolios has the potential to generate a wide array of asset allocation plans.  In the following example I am sticking with the general percentages allocated to the broad asset classes, as recommended by David Swensen, but you will see that I am adding asset classes as suggested in the "Faber Ten" portfolio. … [Read More...]

Portfolio Performance Data: 10 August 2012

As promised earlier in the week, here are the performance values for the eleven portfolios tracked on ITA Wealth Management.  Platinum members have access to all the transactions for eight of the eleven portfolios.  Detailed information is not available for the Maxwell, Euclid, and Madison portfolios.  If this data shows anything, it is how difficult it is to outperform the broad … [Read More...]

400 Level

Market Conditions: A Summary for Early June

As the market continues to slide there seems no place to hide.  PCY was up slightly this morning, but even GLD was negative when I last checked.  Here are links to use to check for both broad market conditions and your individual holdings.  Let's first start with a few broad market direction finders. 1) Bullish Percent Indicator 2) High Low Indicator 3) Stocks above 50-Day … [Read More...]

Bullish Percent Indicators for 11 January 2013

Overall, most of the indexes and individual sectors showed strength this week when measured by the Bullish Percent Indicators.  The following tables speak for themselves.  Offense definitely dominates both the broad indexes and the specific sectors of the market. … [Read More...]