100 Level

Gordon Equation: What Is It Projecting?

Gordon Equation "If one of life's secrets is ... keep your head when all those around you are losing theirs, then the Gordon Equation is the collar that will keep it there." - William J. Bernstein. When discussing the Gordon Equation, we do not want to confuse the simple investment equation with the Klein-Gordon physics equation.  A Google search for the Gordon Equation will … [Read More...]

It All Begins With Saving

Any book, blog, manuscript, or discussion related to investing starts with saving.  Apply "The Golden Rule of Investing."  Simply stated, save as much as you can as early as you can.  Begin saving as early in life as possible.  When teaching young folks the importance of the Golden Rule, I presented them with a simple spreadsheet.  Here are the essential … [Read More...]

300 Level

Latest ETF Rankings

Anyone updating their portfolio tomorrow can make use of the latest ETF rankings.  Concentrate on ETFs that are outperforming the SHY or even SHY and VTI. … [Read More...]

Swensen Six With & Without Stocks

Benefits to Super Charging Portfolio With Stocks Two portfolios are displayed below.  In the first we have a portfolio made up of only six ETFs.  I call this the Swensen Six. To point out some critical features, note the projected average annual return of 7.89% or 7.9% rounded.  This is based in the assumption the S&P 500 will return an average annual return of 7.0%. The … [Read More...]

200 Level

Portfolio Performance Update: 5 March 2013

Nearly two months passed since I last updated the portfolio performance data table.  I'm not trying to hide anything.  Instead, I've been working on other projects such as portfolio optimization.  Since the last review the U.S. Equities market has been on a tear.  In context my comments below need to reflect the fact that not all February dividends are recorded in the following data and none of … [Read More...]

Portfolio Construction the ITA Way

David Swensen writes in his "Unconventional Success" book, "Construction of a financial-asset portfolio involves full measures of science and art.  The science encompasses the application of basic investment principles to the problem of combining core asset classes in an efficient, cost-effective manner.  The art concerns the use of common-sense judgment in the challenge of incorporating … [Read More...]

400 Level

Tactical Plan for Maxwell & Euclid Portfolios

As mentioned in an earlier post, I need to set out a plan of action so as to pull the IRR values of both the Maxwell and Euclid portfolios ahead of the IRR for the VTSMX benchmark.  Both portfolios are lagging, in part due to inattention and carrying too much cash.  The follow approach is designed to turn this around. This material is not available for Seeking Alpha. … [Read More...]

Rethinking the ITA Risk Reduction Model

In late October of 2011 the ITA Risk Reduction model was introduced.  ITARR is a modification of a timing model I used as far back as the early 1980s and more recently patterned after the Faber - Richardson model explained in detail in the Ivy Portfolio book.  ITA readers unfamiliar with the risk reduction model will find it through links or searches on this blog.  It is worth a review or an … [Read More...]