100 Level

My Portfolio Is Performing Great. Really? How Do You Know?

One comment I frequently hear when folks talk about investments is the following. "My portfolio is performing great." This statement conjures up questions I rarely ask as it tends to put the investor on the spot. Here are a few question that run through my mind. Performing great with respect to what? When was the portfolio launched? Is the portfolio return calculated by an acceptable … [Read More...]

The Condition of Bonds Using Delta Factor

What is the current condition of bond ETFs and should they be part of the portfolio?  To examine this question one method of analysis is to apply the Delta Factor.  When I run a reversion-to-the-mean analysis on bonds, I use AGG as the reference or standard.  For equity ETFs I use the VTSMX total stock index fund.  In the following table each bond ETF is compared with the … [Read More...]

300 Level

Passive Investing: How to Solve a Complex Problem

Photograph: Tug-of-Toy Photograph:  In memory of Cody, victor in the Tug-of-Toy contest. Passive investing through the use of index ETFs is a solution to a complex problem.  Here at ITA Wealth Management, we guide individual investors through the process of setting up a Strategic Asset Allocation (SAA) plan, maintain it, and monitor it for return vs. a benchmark as well as risk … [Read More...]

You Can’t Manage What You Don’t Measure

Proper portfolio management requires a number of measurement activities.  How is an investor to know what is going on within their portfolio if they do not take the time to accurately measure not only the performance of the portfolio, but the performance of an appropriate benchmark, and portfolio uncertainty or risk?  Note the emphasis on appropriate.  Managing a single portfolio, … [Read More...]

200 Level

Simplified “Holy Grail” Portfolio: A 12-ETF Approach

12-ETF Portfolio Following up on yesterday's blog post, here is a simplified revision of the "Holy Grail" portfolio.  Any time one can reduce the number of holdings and improve the return and volatility projections, give the new portfolio high marks.  The following group of twelve (12) ETFs provides a higher Return/Risk ratio than the portfolio discussed yesterday.  … [Read More...]

Portfolio Performance: 30 September 2011

Third Quarter Portfolio Performance Results* Finally - the bum third quarter is finished.  Done and over!  Every portfolio gave some ground to the Internal Rate of Return (IRR) calculation.  Rare is the portfolio that performed well during the recent volatile market.  In the table below, the figures are a little lower than the actual values as I have yet to enter any third … [Read More...]

400 Level

Sortino Ratio: Revised Calculation

Platinum members likely picked up my reference on the new Sortino Ratio (SR) calculation in the comments section.  When you first log on to ITA Wealth Management, be sure to check for the latest comments or better still, sign up for a comments RSS.  What is changing with the SR calculation? … [Read More...]

“Delta Factor” Equity Projections

Photograph: Fish trap used to catch juvenile salmon and steelhead that are making their way to the ocean. A recent question regarding whether or not VWO is a buy or a sell prompted me to run a Quantext Portfolio Planning (QPP) analysis on my list of equity ETFs.  Below is the the "Delta Factor" projection data table showing the five ETFs that have the greatest probability of doing … [Read More...]