100 Level

Passive Investors

Passive Investing or Passive Management: Passive investing is the antithesis of active investing. Investors who subscribe to a passive style of investing do not think they can beat the market. Passive investors are strong advocates of the efficient market theory and that is – all information is reflected in the price of the product. While passive managers conclude they cannot beat the market … [Read More...]

Market Movement Trumps Asset Allocation

Market, Management or Asset Allocation Much as we advocate asset allocation here at ITA Wealth Management, it is difficult to argue with the latest Ibbotson research that demonstrates the importance of market movement when it comes to portfolio performance.  This should not come as a surprise as we have all seen our investments rise and fall as if they are highly correlated with Mr. … [Read More...]

300 Level

Constructing a Simple Seven ETF Portfolio

Looking for a conservative portfolio with reasonable QPP values?  Check out the following asset allocation plan that includes 40% allocated to bonds and income with an added bent toward value as advocated by Fama & French.  This portfolio covers the global market, both in equities and REITs.  The EFV ETF skews the portfolio toward the value side. … [Read More...]

Avoid Losses

There is nothing quite so painful to the long-term investor as watching their portfolio experience a long and precipitous decline. Most of us experienced this in 2000 through 2002 and again in 2008 and early 2009. Diversification did not help all that much in the recent severe bear market. Asset allocation, no matter how carefully designed, did not perform as we expected. All asset classes seemed … [Read More...]

200 Level

Newton Portfolio Review

Thirty shares of VO were added to the Newton yesterday, bringing the Mid-Cap Blend asset class closer to balance.  I am slowly pulling this portfolio back into balance.  Emerging Markets (VWO) is the asset class that needs primary attention.  Plenty of cash is available in the Newton, making it much easier to bring asset classes below target back up to their targeted … [Read More...]

Portfolio Performance Data – 29 April 2011

While this was a good week for all portfolios in absolute terms, relatively speaking, nearly every portfolio lost ground to one or more of the benchmarks.  Advances from last week were essentially wiped out this week.  When the market is in a strong bull phase as is now the case, it is difficult for a broadly diversified portfolio to keep up with U.S. equities and that is what we saw … [Read More...]

400 Level

Passive vs. Active Investing

Why do large endowment funds use a passive investment strategy? Is it due to fund size and their portfolios are so large they mirror the market? Again, quoting from my “Active vs. Passive” paper, we have the following. “An estimated 40% to 50% of all institutional monies are in index or passive portfolios while only 3% to 4% of retail investors make use of passive strategies. … [Read More...]

Risk Parity Analysis of Modified “Ivy-10″ Portfolio

When investors populate their portfolios with stocks or equity ETFs, it is easy to forget just how exposed the portfolio is to risk.  The following analysis is a reminder of the high risks we take when constructing portfolios.  To know a little more about Risk Parity, check out this link. … [Read More...]