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...]

What Does It Take To Retire?

What does it take in savings to live during retirement? Here is data readers may find of interest as they think about portfolio development and eventual retirement. A couple nearing retirement anticipate they will need $80,000 after taxes per year to live during their first year without employment. Between them they will receive a pension of $2,000 per month or $24,000 per year. These are all … [Read More...]

300 Level

Become Your Own Investment Advisor and Save The Fees

Taking on the responsibility of managing your own portfolio can be, but need not be, a daunting task.  Some folks just don’t want anything to do with managing their own financial affairs.  It seems either too difficult, too important, or simply carries no interest.  While I have had almost a life-long interest in investing, it is understandable why many find it rather … [Read More...]

Benchmarking the Portfolio

Benchmarking Portfolio Establishing an appropriate benchmark for a portfolio is essential if one is serious about investing. Avoiding portfolio benchmarking is an act of self-deception. Exactly what is the purpose of a benchmark and what are the requirements for a fair and reasonable benchmark. Here is one definition of benchmarking.   In the investing world, the S&P 500 is … [Read More...]

200 Level

The Asset Allocation Decision

What asset classes should be included in a portfolio?  Global diversification is highly recommended.  A well-diversified portfolio will contain, at a minimum, the following asset classes. … [Read More...]

Portfolio Performance: 18 February 2011

  ITA Wealth Management readers will find the February 18 portfolio performance data table below. Since the last update, the Curie, Newton, Schrodinger, Einstein, Bohr, and Maxwell gained ground on either the VTSMX or ITA Index benchmarks.  Several of these portfolios also showed an increase in the Sortino or Retirement Ratios.  When this occurs, it is a significant positive … [Read More...]

400 Level

Portfolio Risk: Why is Standard Deviation Important?

Questions surrounding standard deviation (SD) keep cropping up.  Why is SD important when it comes to developing a Strategic Asset Allocation plan for a portfolio? Anyone who has worked with portfolio building software knows how projected return and uncertainty or risk are intimately connected. When I was teaching, I would analyze the scores of my students as I wanted to see if all numerical … [Read More...]

Containing Portfolio Risk

It will be a close call for many asset classes held in the Madison Portfolio when it comes up for examination on Wednesday of this week.  Developed international markets (VEU) is just one example of the narrow gap between the price of the ETF and its 195-Day Exponential Moving Average (EMA).  While most of the asset classes have a cushion before a sell signal is given, several of the … [Read More...]