100 Level

QPP Challenge

For readers using the QPP software, here is a challenge.  Come up with a portfolio that meets the following standards. Include between 8 and 20 ETFs. The projected return will exceed the projections of the S&P 500 by one percentage point.  As an example, I set my S&P assumption to be 7.0% so the projected return will come in above 8.0% The projected risk or uncertainty is … [Read More...]

Index vs. Passive Investing

Harold R. Evensky, in his Wealth Management: The Financial Advisor's Guide to Investing and Managing Client Assets book, makes a distinction between index and passive investing.  The distinctions can be found at this location.  Few readers are unaware of the differences between active and passive management, but the subtle definitions between index and passive management deserves some … [Read More...]

300 Level

X-Ray of Gauss Portfolio

The following two screen shots are the "X-Ray Analysis" of the Gauss Portfolio by Morningstar.  As you look over these results, how would you improve the make-up of this portfolio?  What ETFs would you add or subtract to improve the quality of this portfolio? I was unable to capture all the information in one screen shot and that is why the information is broken into two … [Read More...]

Portfolio Management

Developing Portfolio Policy Portfolio management begins with a well considered Portfolio Policy. Basic portfolio plans include the following: Asset classes to include in the portfolio Percentage to invest in each asset class Investments to populate asset classes Portfolio monitoring method Projected return analysis Projected risk analysis Selection of appropriate … [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...]

Bohr Portfolio Review: 15 September 2011

Since the last update, shares of RWX, VOE, VEU, VTV, DVY, VWO, and VUG were added to the Bohr portfolio.  The number of shares were small as most of the asset classes are in balance.  The two asset classes that need attention are large-cap value and international REITs.  I over-shot large-cap value with purchases in VTV and DVY.  Mid-Cap Blend will take care of itself.  As … [Read More...]

400 Level

Monitoring The Eight Critical ETFs For the ITA Risk Reduction Model

Photograph: Pinnacles National Monument - California After the market closes tomorrow, I will be examining the Gauss Portfolio to see if any of the eight critical ETFs show prices crossing from above to below their 195-Day Exponential Moving Averages.  While we may avoid activity within the Gauss, if the markets continue to behave as they have for the last week, there most certainly will be … [Read More...]

When To Buy Back ETFs: Replacing ITARR Sold Positions

When is it time to buy back those ETF positions that were sold when the price of the ETF moved from above to below the 195-Day EMA?  A cogent question came up as a comment this morning.  Here is a paraphrase of the inquiry.  "VEU, VWO, DBC, etc. are all well under their respective RSI 30% indicator.  Even if one is following the ITA Risk Reduction model, does it not make … [Read More...]