100 Level

Active Management Headwinds

Odds of Success for Active Managers Richard A. Ferri discusses the various headwinds the investor faces if they choose the path of selecting actively managed mutual funds.  In his book, "The Power of Passive Investing," Ferri lists the primary obstacles to achieving success.  Success is defined as performing better than an index oriented portfolio. 1. The probability of … [Read More...]

What Is (Was) The Motivation For ITA Wealth Management?

What is the motivation for writing this blog? Here are a few reasons. I wanted to learn how blogs work, and there seemed no better way than to set one up. Writing this blog required me to dig into academic papers I filed away years ago.  Rereading a number of investment books is a side benefit. I wanted to pass on what I learned from over fifty years of investing. This investing … [Read More...]

300 Level

Gauss Portfolio Update: 11 October 2012

Photograph:  St. Louis Arch captured by Lowell Herr Next up for review is the Gauss Portfolio.  Since this is a smaller portfolio I do not use any of the growth ETFs.  Instead, I capture growth through the use of several blend asset classes.  As the portfolio grows I may open up the growth asset classes, although it hardly seems necessary since all the U.S. Equity asset … [Read More...]

Portfolio Performance Data – 29 April 2011

While this was a good week for all portfolios in absolute terms, relatively speaking, nearly every portfolio lost ground to one or more of the benchmarks.  Advances from last week were essentially wiped out this week.  When the market is in a strong bull phase as is now the case, it is difficult for a broadly diversified portfolio to keep up with U.S. equities and that is what we saw … [Read More...]

200 Level

Preparing for Retirement: Avoid the Dunning-Kruger Effect

A few days ago I came across an article on the psychology of investing over on the Portfolioist blog.  The article is written by Daniel R. Solin, author of "The Smartest Portfolio You'll Ever Own." Readers will recall that I analyzed some of the portfolios from the Solin book here on ITA Wealth Management.  When I read articles of how our brains can get in the way of … [Read More...]

Portfolio Performance: 1 April 2011

Below is the Performance - Uncertainty data table for April 1, 2011.  In the process of updating the table, I focus on the changes in Sortino Ratio (SR) and Retirement Ratio (RR) as those values combine both return and uncertainty for each portfolio.  Since the last update, four (4) portfolios showed gains in the Return/Uncertainty ratio while three (3) showed losses and three (3) came … [Read More...]

400 Level

August “Delta Factor” Risk-Adjusted Portfolio For Interested Investors

What is a "Delta Factor" risk-adjusted portfolio and how is it constructed?  Rather than considering this as a potential portfolio for actual use, view it as an experimental portfolio.  Here are the steps I used to come up with this combination of ETFs. … [Read More...]

Portfolio Risk: Advantages of Semivariance

Semivariance: Preferred Risk Measurement Portfolio risk is given lip service, but rare is the investor who takes pains to actually measure the risks involved in the makeup of their portfolio. It is common to hear an investor indicate they have a well-diversified portfolio if it is made up of more than 15 to 20 stocks. The correlation between the investments might be a mystery, yet the claim is … [Read More...]