100 Level

Portfolio Construction: Asset Allocation Percentages Are Vital To Success

 Photograph: Fisherman in Greek Islands   This Blog is dedicated to helping the beginning investor build and monitor a portfolio.  Here are a few of the basic guidelines. Skew the portfolio toward small-cap ETFs and play down large-cap ETFs.  Evidence for this shows up in the Portfolio Performance data tables. Emphasize value over growth as value outperforms growth … [Read More...]

What Is A Good Sortino Ratio?

Before answering the above question, one needs to know what the Sortino Ratio is measuring.  Here is the Wikipedia definition.  To keep this idea as simple as possible, write down the equation, S = (R - T)/DR.  S = Sortino Ratio. The R is the Internal Rate of Return (IRR) for the portfolio.  If you are using the TLH Spreadsheet*, the IRR is calculated for you by the Excel™ SS. T is the … [Read More...]

300 Level

New Normal Portfolio Revisited

Nearly two years ago, the New Normal Portfolio was launched by one of the ITA clients.  If you have been reading the comments, you know this is a defensive oriented portfolio.  Below is the latest QPP data on the NN.  The projected Return/Uncertainty (or Risk) is 0.57.  As I recall, when this portfolio was established two years ago, the ratio was well above 0.60.  The … [Read More...]

Risk Reduction Portfolio: A Potential Asset Allocation Plan

Bob Warasila, author of the "New Normal" portfolio, sent me an asset allocation plan that is worth sharing with Platinum members.  This Risk Reduction Portfolio differs slightly from one I recently posted over on Seeking Alpha in that this portfolio has a small exposure to precious metals and it also includes on stock.  In the following three screen shots readers will find the … [Read More...]

200 Level

Beat The Market

How many times have you heard the phrase, "Beat The Market?" Over a year ago, Mark Hulbert wrote an article on this subject. Here is an important quote from the Hulbert article. If you don't know who Mark Hulbert is, Google his name and learn about his contributions to the field of investing. "Even that, however, underestimates the difficulties of beating an index fund. … [Read More...]

Einstein Portfolio Review

Last week I added a few shares of RWX, VWO, and EMB to the Einstein to bring a few asset classes into balance.  Other than the Bonds & Income asset class, this portfolio is now in balance. One Tactical Asset Allocation I will be making is to shift one percentage point from Small-Cap Growth over to Small-Cap Value.  i will use IWN for my Small-Cap Value ETF.  Another change is … [Read More...]

400 Level

Sharpe Ratio: Why I prefer the Sortino and Retirement Ratios

The Sharpe Ratio is a measure of return-risk for a portfolio or individual investment.  Like many concepts that lend themselves to mathematics, it is easier to understand what the Sharpe Ratio means if written in the form of an equation. S = (R - T)/Sigma     (My editor does not have the correct symbol for Sigma.) Developed by Stanford Professor, William F. Sharpe, … [Read More...]

Where Is The Market?

Without going into a lot of explanation, contemplate the following graphs.  This graph is a composite of the stocks on the New York Stock Exchange. Platinum membership is available for a mere $5.00 per month.  Learn how to reduce portfolio risk. … [Read More...]