100 Level

Five Investing Basics

The Basic Rules of Investing Readers of "The Investment Answer" will remember the five decisions laid out by Daniel Goldie and Gordon Murray.  If you need a quick reminder, go to this site for a review.  You will recall I disagree with Goldie and Murray on the conclusion of the first decision of portfolio management.  Will you do it yourself or will you seek … [Read More...]

Lost My Spouse – Part III

Determine your long-term cash flow. How much monthly income is required?  Will income from pension and social security meet the cash flow requirements or is additional money required from the portfolio?  For most single retired individuals, some income is required from the portfolio.  My recommendation is to pull no more than 4% annually from the portfolio.  The lower the … [Read More...]

300 Level

Accuracy of QPP Projections

How accurate have Quantext Portfolio Projections been over the last bear and bull markets.  Back on 12/31/2007, QPP projected an annualized return of 7.4% with a standard deviation of 10.5% for a portfolio made up of SPY, IWM, EFA, EEM, TIP, TLT, AGG, and IEF.  The exact percentages are listed in the screenshot below.  That low risk percentage looked great in December 2007, but we did not foresee … [Read More...]

Preparing a New Portfolio for a Customized Benchmark

Within the TLH Spreadsheet is the capability to develop a customized benchmark for any portfolio that uses any combination of the 17 asset classes found in this blog post. If you are new to ITA Wealth Management, note that we pay a lot of attention to asset allocation, even though it has recently fallen out of favor, particularly since the 2008 market crash.  Why build a customized … [Read More...]

200 Level

Retirement Rule #5: Understand Employer Retirement Plan

Assuming your employer has established a retirement plan and you are taking advantage of it, there is still another important step in the process.  It is essential you know something about the plan, particularly what options are available for investing.  It is not unusual for a mutual fund family to work out an arrangement with a company to provide a variety of actively managed mutual funds for … [Read More...]

Eight Asset Porfolio

Photograph: When I first walked Devastation Trail in late 1961 or early 1962, there was no vegetation to be seen as it was soon after the eruption. Consider the following portfolio that holds eight assets including cash.  In this analysis, I am using the 20-year treasury ETF, TLT, to represent cash, a substitution that gives the portfolio a slight boost over current money market rates.  … [Read More...]

400 Level

A Risk-Parity Look At The New Normal Portfolio

While I don't know if the current makeup of assets matches my most recent copy of the New Normal, a look at a risk reduction or equal rating of risk is instructive.  Check out the QPP analysis below. … [Read More...]

Pre-Maxwell Review

This weekend the Maxwell Portfolio is up for review, and as Platinum members will recall, this portfolio is one of the five used to test the ITA Risk Reduction model.  Of the critical eight ETFs used in this experiment, only DBC is currently priced below its 195-Day Exponential Moving Average (EMA).  While I expect this to continue through today's market, that could easily change as … [Read More...]