100 Level

Easy Investing

While few stock pickers are successful investors, the index investor or a passive oriented investor can do better than the majority of stock market participants by following a few simple rules.  One of those rules is simply - Don't build your portfolio by picking individual stocks.  Use index funds or index ETFs.  Investors saving small amounts of money each month are better off … [Read More...]

Equal Weighted vs. Cap-Weighted Indexes

Before Robert D. Arnott came out with his book, "The Fundamental Index: A Better Way to Invest," the subject of building indexes around equal weight given to each stock rather than cap-weighted methods was under hot discussion.  Which is the better approach?  Arnott makes a compelling case for equal weighting as does the following paper referenced below.  Equal weighted … [Read More...]

300 Level

Passive vs. Active Investment Strategy

Using Morningstar and Yahoo-Finance to compare stocks and ETF performance.* Here is an exercise that will prove informative to investors who construct portfolios using stocks. Follow these instructions. … [Read More...]

Walgreen (WAG): A Service Company of Interest

As long-time ITA readers know, I am a strong advocate of using non-managed index ETFs to build portfolios.  However, there are times when I will add an individual stock, particularly if the Quantext Portfolio Planner (QPP) analysis shows the stock will increase diversity and lower portfolio volatility.  While I have not run a QPP analysis with Walgreen (WAG) in a portfolio, this is a stock I've … [Read More...]

200 Level

Bohr Portfolio Review: 23 April 2012

This last week in April looks to be a full one as four portfolios are up for review.  This morning I am updating the Bohr.  Moments ago I checked the TD Ameritrade Bohr account for dividends paid out by BND, TLT, and TIP.  Note the addition of the International Bonds asset class in the following Dashboard, even though I have yet to allocate a specific percentage to this new asset … [Read More...]

Index Funds Advisors Asset Class Comparison: Examining The Big Return vs. Risk Picture

Index Funds Advisors Asset Class Comparison:  As promised yesterday, the third video talk from Index Funds Advisors is located at this URL.  Mark Hebner provides the large picture of the relationship between return and risk.  If you missed the first two presentations, go back to this blog entry to pick them up.  While you are on the IFA web site, I recommend each reader take … [Read More...]

400 Level

Is Risk Receiving Too Much Attention?

Are we paying too much attention to risk or portfolio uncertainty?  The answer to that question may not be as straight forward as readers might expect.  Each time ITA Wealth Management readers see a Quantext Portfolio Planner (QPP) analysis, projected portfolio uncertainty is one of the five critical metrics or outcomes.  Since projected return and projected standard deviation (SD) … [Read More...]

Retirement Planning: Stress Testing a Simple 5 ETF Portfolio

As mentioned in a recent post, stress testing the portfolio is one useful method of checking to see if there will be sufficient funds available to comfortably retire.  In this QPP analysis of a simple five ETF portfolio we will make some initial assumptions that will vary from investor to investor. Assume this investor is 50 and plans to retire at age 67.  The current portfolio is … [Read More...]