100 Level

Feynman Portfolio Study – Part 1

This first Part of the Study identifies the 10 Asset Groups and 18 individual EFTs that comprise the Feynman Portfolio and looks at the general market behavior, as defined by the Vanguard Total Stock Market Fund (VTSMX), over the 6 year period from 06/29/2007 to 06/30/2003.  The VTSMX will be used as the reference, or benchmark, for comparison of portfolio performance through each future phase of … [Read More...]

What Are The Disadvantages of Index Funds?

This morning I noticed a reader was searching for disadvantages associated with index funds, so I decided to do a little internet searching to find some of the drawbacks, if any.  As soon as one delves into this question, up pops the issue of passive vs. active investing.  Here are a few resources I located that deal with the question - are there disadvantages to using index funds?  I include … [Read More...]

300 Level

“Holy Grail” List of ETFs for Momentum-Optimization (MOM) Portfolio

Readers who have been following The Feynman Study will be interested in this list of ETFs that can potentially be used to build a "momentum" style portfolio.  What I've done is to include the 18 ETFs from the Feynman Study, add four sector ETFs that currently outperform both SHY and VTI, and included a few options that might be useful in a bear market.  If you missed some prior references related … [Read More...]

Portfolio of Actively Managed Mutual Funds

The following Quantext Portfolio Analysis contains actively managed mutual funds and the portfolio is designed for a 40-50 year old investor.  Keep in mind a few assumptions and expectations.  1) In this analysis the S&P 500 is assumed to grow at 7.0% over the next few years.  2) When putting together an array of securities we expect the projection will exceed 7.0% by 100 basis points.  3) The … [Read More...]

200 Level

Super Smart Portfolios from Solin

Daniel Solin, in his "Smartest Portfolios" book, recommends these nine index funds or ETFs when putting together smart portfolios.  While my preference is to use ETFs instead of index mutual funds, here are his recommendations. … [Read More...]

Active vs. Passive Investing: Part 9

Section Nine of the Active vs. Passive article focuses on the chance argument. "Indexers dismiss individuals' long-run record of outperformance with the argument that "It doesn't count because it was only to be expected from the random variable outcomes of cumulative 50/50 yearly probabilities of beating the index (i.e. luck not talent)". The intuitive error in that logic … [Read More...]

400 Level

Sortino Ratio: Revised Calculation

Platinum members likely picked up my reference on the new Sortino Ratio (SR) calculation in the comments section.  When you first log on to ITA Wealth Management, be sure to check for the latest comments or better still, sign up for a comments RSS.  What is changing with the SR calculation? … [Read More...]

Semi-Variance: The Better Risk Measurement

Photograph: Government buildings in Lisbon, Portugal Updating Sortino and Retirement Ratios Risk Management Users of the TLH spreadsheet will want to update the semi-variance calculation in the SR worksheet after the market closes and all the index data is available.  To make sure you have the latest data, wait until at least three hours after the market closes so all the benchmarks are … [Read More...]