100 Level

Grandchildren: Use Index Funds

Build Your Portfolio Using Index Funds For most investors, what type of investment vehicles to use is a no-brainer.  Unless you are extremely skilled, stick to index mutual funds or index ETFs and stay away from selecting individual stocks as the way to build the core of your portfolio.  Become a passive investor or at the most, a Mosaic investor.  Educate yourself and then come to … [Read More...]

Example of How Saved Efficient Frontier Works

The following Efficient Frontier graph is designed to show portfolio progression or regression from one evaluation to the next.  In the following graph we find an example of portfolio regression. Efficient Frontier:  The top graph (yellow) with the blue dot is an example of a "Saved Efficient Frontier."  This is the EF of a portfolio approximately one month ago before any changes were made.  … [Read More...]

300 Level

Einstein Portfolio Update: 12 June 2013

Here is the latest information on the Einstein Portfolio.  This review includes the Dashboard, Performance, Efficient Frontier, ETF Rankings, and Buy-Hold-Sell Recommendations.  We begin with the Dashboard. Dashboard:  Precious Metals (GLD) and Commodities (DBC) continue to be priced well below their 195-Day Exponential Moving Averages (EMA) so we are staying on the sidelines with those two … [Read More...]

Avoid Losses

There is nothing quite so painful to the long-term investor as watching their portfolio experience a long and precipitous decline. Most of us experienced this in 2000 through 2002 and again in 2008 and early 2009. Diversification did not help all that much in the recent severe bear market. Asset allocation, no matter how carefully designed, did not perform as we expected. All asset classes seemed … [Read More...]

200 Level

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...]

Asset Allocation: How Important Today?

Asset Allocation Due to a recent Ibbotson study (Unfortunately, this article now requires one to register.) asset allocation is not the investment elixir today it was thought to be in the late 1980s and 1990s. Nevertheless, it remains the best method for constructing portfolios if the goal is to outperform a broad market benchmark index such as the VTSMX or ITA Index* while reducing portfolio … [Read More...]

400 Level

How To Handle Emerging Markets (VWO) Today

If a portfolio were up for review today, how would I handle the ETF we use for our emerging markets (VWO) investment?  The first move is to check several indicators as listed below. Platinum membership is available for $5.00 per month.  … [Read More...]

Sydney Morning Herald Article

Photograph: Mt. Lassen in California The following article ("It's still business as usual for Wall Street") just appeared in the Sydney Morning Herald on-line paper.  The three recent crashes discussed include the 1987 drop when the DJI gave away 22% with a 522 point drop.  Then we had the tech blowup in early 2000 through 2002.  Even worse is the current Global … [Read More...]