100 Level

“Delta Factor” for Maxwell & Euclid Portfolios

Initially, the plan is to hold only five equity ETFs in the Maxwell and Euclid portfolios.  Those five are: VTI, VEU, VWO, VNQ, and RWX.  Yes, there will be bond and income ETFs, but the equity investments will be confined to five ETFs - at least at the beginning of this experiment.  At the close of the market on October 4, 2011, what is the "Delta Factor" data telling … [Read More...]

My Saving Plan Is In Place: What Is The Next Step?

Is it safe to assume you have read one or more of the following sources? 1) Chapter 1 of The Elements of Investing by Malkiel and Ellis 2) Pages 143 - 144 and 152 - 154 of The Investor's Manifesto by William J. Bernstein 3) Pages 179 - 184 of The Power of Passive Investing by Richard Ferri 4) Rule 1 (Chapter 1) of Millionaire Teacher by Andrew Hallam Using these resources, and … [Read More...]

300 Level

Optimizing Dividend Stocks

Here is my optimization analysis on a 12-Dividend portfolio made up of individual stocks.  It might be interesting to look at a portfolio made up of 20 to 30 individual stocks. I like the 9.0 projected return and the high Return/Risk ratio.  A yield of 2.7% is also quite respectable. Do these results match others who are using this optimizer in conjunction with the QPP software? … [Read More...]

Swensen Six: Comparing Optimizers

Using the simple Swensen Six, the following analysis compares the QPP and Hoadley optimizers when no constraints are applied.  The recommendations are quite different.  In both situations I used five years of historical data and assumed the market would grow at 7% annually. First, let's look at the QPP optimization.  With not constraints applied, the QPP recommends 100% of the portfolio be … [Read More...]

200 Level

Active vs. Passive Investing: Part 1

The article, "Why I Prefer Index Instruments" stirred up a little discussion on Seeking Alpha.  Within all the comments was a link to a most interesting 12 page rebuttal of passive investing.  I suggest readers print out this article and number the bullet points of each section.  My plan is to write twelve (12) blogs using as an outline the twelve points discussed in the … [Read More...]

Smartest Portfolio You’ll Ever Own?

Below is a portfolio I extracted from Daniel Solin's recent book, "The Smartest Portfolio You'll Ever Own."  Before I run a QPP analysis on one of the suggest portfolios, let me point out that the BWZ ETF did not have a three-year record.  As a result, the following analysis runs for only 31 months.  Under current market conditions, my preference is to use 48 … [Read More...]

400 Level

Is It Time To Buy The Commodity, DBC?

The quick answer is, NO.  Why is it too early to move back into the commodity ETF?  Let me count the ways.  First, start with the PnF graph, shown in the first slide.  Today's big drop is shown with a 6 showing up in the right-hand column.  That 6 indicates DBC had another one box drop in June which means we are adding another O in this column.  Supply for DBC … [Read More...]

ITARR Working As Planned

When the ITA Risk Reduction model was instituted several months ago, the logic behind the plan was to take a few portfolios that were lagging their benchmarks and see if there was a way to turn that situation around.  So long as the market was moving up and the prices of the various ETFs never dipped below their 195-Day EMAs, I did not expect to see much change in the Internal Rate of Return … [Read More...]