100 Level

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...]

Developing a Passive Management Investment Strategy

Passive investing is intellectually appealing to the investor willing to shun Wall Street propaganda and hype from a 200 billion dollar industry.  Just to be clear, we concede there are, and will be, active money managers who outperform their benchmark.  However, as the years go by the winners dwindle in number and it is very difficult to select which managers will be successful thirty … [Read More...]

300 Level

“New Normal” Portfolio Analyzed

Long-time readers of ITA Wealth Management are familiar with the "New Normal" portfolio, a risk oriented portfolio developed by a Platinum member.  Following is an analysis of an approximation of the NN portfolio.  Approximate in the sense that several tickers were combined into one as the "Ranking Software" will not handle more than twenty investments in one run.  In addition I substituted XOM … [Read More...]

QPP Analysis of Another Low Risk Retirement Portfolio

The nexus for the following portfolio begins with this Seeking Alpha article and the follow-up QPP analysis of a portfolio suggested by a SA reader.  A link to the second analysis can be found here.  And now we come to the third portfolio in this series of low risk retirement plans.  This last set of ETFs was suggested by a reader of the ITA blog. The four ETFs that make up this … [Read More...]

200 Level

Retirement Planning: A Conservative Approach

When planning for retirement, I always prepare with a conservative outlook in mind.  Even so, one will likely experience surprises, some positive and some negative.  The following portfolio is laid out with a 45 year-old in mind.  The investment vehicles are definitely tilted toward a dividend approach as I think that is where most of the portfolio return will come from over the … [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

Efficient Frontier: A Brief Explanation

In preparation for a fresh design of this blog I asked for suggestions how to improve the "look and feel" of ITA Wealth Management.  Several suggestions focused on the need for further explanation of some of the technical aspects of investing.  Before going too technical, keep in mind that as investors, we continually ask the question - "What portfolio will produce the most return for the least … [Read More...]

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...]