100 Level

Portfolio Performance Data Table: 30 October 2012

Since the last portfolio performance update over a month ago, every portfolio with exception of the Euclid gained ground on the VTSMX benchmark.  All portfolios except for the Euclid and the Einstein gained ground on the ITA Index, the benchmark that is customized to measure relative performance for each portfolio.  These performance gains also improved the Sortino and Retirement Ratios. In … [Read More...]

Solving Investment Problem #4: Fear of losing money.

The fear of losing money once it is invested in the stock market is quite natural.  Investing in the market from early 2000 through early 2009 was a particularly volatile period and not one to inspire investor confidence.  The alternatives to building adequate savings for retirement are limited.  Banks are paying zero to very little interest.  CDs are also generating low … [Read More...]

300 Level

Please Keep It Simple: A Basic Seven-Eight ETF Portfolio

Is it possible to put together a simple portfolio?  I don't want anything too complicated, particularly when I am just beginning my investing career.  Such requests are common and the answer is - yes, it is possible to build a simple portfolio.  The diversification may not be the best, but that issue can be address later.  Below is a basic portfolio any investor can … [Read More...]

Harry Browne’s Permanent Portfolio: What Is Behind The Asset Allocation?

The December 2012 issue of the American Association of Individual Investors Journal carried an interesting article, The Permanent Portfolio: Using Allocation to Build and Protect Wealth.  The article is all about Harry Browne's portfolio laid out several decades ago.  Browne recommended the follow asset allocation. 1. 25% in stocks. 2. 25% in bonds 3. 25% in cash 4. 25% in gold On … [Read More...]

200 Level

Swensen Six With & Without Stocks

Benefits to Super Charging Portfolio With Stocks Two portfolios are displayed below.  In the first we have a portfolio made up of only six ETFs.  I call this the Swensen Six. To point out some critical features, note the projected average annual return of 7.89% or 7.9% rounded.  This is based in the assumption the S&P 500 will return an average annual return of 7.0%. The … [Read More...]

Active vs. Passive Investing: Part 3

Section Three of the Active vs. Passive paper deals with the non-trivial problem of how to measure portfolio returns.  This is a nasty problem for mutual fund money managers as clients are moving cash in and out of their portfolios at different times.  This cash flow has nothing to do with the managers style of management.  To comply with the Association for Investment Management … [Read More...]

400 Level

Two Bullish Percent Indicators Hand Ball To The Offense

Upward movement in the broad markets brought about a ball exchange in two of the six indexes.  Platinum members have access to the table below.  … [Read More...]

Retirement Ratio: Building a Higher Standard

The Ultimate Return/Uncertainty Ratio Built into every TLH spreadsheet is the "Retirement Ratio," a look-alike of the Sortino Ratio (SR).  Readers can read about this Return/Uncertainty ratio over on Seeking Alpha.  Inside the Sortino Ratio is a trademark term, Desired Target Return™, a percentage determined by the investor.  In the Retirement Ratio we use Portfolio … [Read More...]