100 Level

Standard & Poor’s Indices vs. Active Funds

Readers who need to be convinced that actively managed mutual funds is not a good idea only need to take time to read and study this paper.  This is a follow up to my last post.   … [Read More...]

The Bogleheads’ Guide to Investing

Bogleheads' Guide to Investing was missed by far too many ITA readers when first published back on July 21, 2010 and for that reason I am bringing it forward so newer members will pick it up.  Another investing book that should rank high on your reading list is "The Bogleheads' Guide to Investing," written by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf.  I … [Read More...]

300 Level

Using Treasuries to Reduce Risk

Compare the following portfolio (QPP analysis) with the risk reducing portfolio I suggested last week.  In the following portfolio, I stripped percentages off several equity and REIT ETFs and allocated those assets to a combination of TIP and TLT.  While the projected return is reduced, the projected standard deviation comes down at a faster rate giving one a higher Return/Uncertainty … [Read More...]

“New Normal” Three-Year Risk Reduction Analysis

In the prior blog entry I used five years of data for the QPP analysis of the "New Normal" portfolio when the allocated percentages were based in equal risk rather than allocating assets according to capitalization.  In this QPP analysis I use three years of data instead of five. This blog entry is not for publication elsewhere on the Internet. … [Read More...]

200 Level

Portfolio Performance: 20 May 2011

While nearly every updated portfolio lost a little ground in absolute terms, all gained when compared to either the customized ITA Index, the Vanguard Total Market Index Fund (VTSMX), or one of the two uncertainty or risk ratios.  Absolute terms means that the Internal Rate of Return (IRR) of the portfolio declined.  While this is important, the relative measurements are more significant … [Read More...]

“New Normal” Portfolio With Risk Reduction Allocation Plan

Following up on the risk adjusted Ten ETF Portfolio analyzed yesterday, what does the "New Normal" group of stocks and ETFs look like when the same risk management algorithm is applied.  In this analysis I was able to stretch the historical period out over five-years.  The percentage allocated to the different stocks and ETFs look reasonable when the low variance BND ETF is not … [Read More...]

400 Level

Madison Portfolio Update: ITA Risk Reduction Model

This weekend was examination time for the Madison Portfolio, one of the ITA Risk Reduction model candidates.  Below is the Dashboard from the TLT Spreadsheet as of the market close on 2/17/2012. … [Read More...]

Delta Factor Shouts – The Market Is Over Valued!

Based on the most recent Delta Factor data, the current market is over-valued, and that is putting it mildly.  I don't think I've seen this many "red" projections since the market hit its 2007 highs.  What I did was take both equity and bond ETFs that are commission free for TDAmeritrade clients and use percentages not all that far removed from the recommendations that come out of the … [Read More...]