100 Level

The Art and Science of Portfolio Construction

Basic investment principles require long-term portfolios exhibit the following characteristics. 1.  Equity orientation. Equity orientation includes high-expected return ETFs such as VTI, IWN, VTV, VOE, VOT, VBR, VBK, etc. 2.  Diversification over the entire world market. International exposure is possible through ETFs such as VEU, EFA, VWO, EPP, etc. This blog post is not … [Read More...]

Key Ideas to Beginning Your Retirement Program

Keys to successful retirement investing. It All Starts With Saving Follow The Golden Rule of Investing.  Time is money. “Save as much as you can as early as you can.” Five critical investment decisions. The Management Decision Will you do it yourself or will you hire a professional money manager? The Active vs. Passive Decision Will it be stock, index funds, … [Read More...]

300 Level

IVY-2: Ten ETF Portfolio

The second portfolio recommended by Faber and Richardson contains ten ETFs.  There are a few new asset classes added such as small-cap, emerging markets, and foreign or international REITs.  Are we able to improve the Return/Risk ratio and elevate the Diversification Metric with these additions?  Check the analysis below for the answer. A "seat of the pants" analysis … [Read More...]

Low Risk Portfolio Using Dividend Oriented Stocks: Part III

Low Risk Portfolio Number Three Portfolio number three in this series of low risk asset allocations is shown below.  The percentage of funds was suggested by a Platinum member.  One of the major changes in this portfolio involves decreasing the allocation to VNQ from 7% down to 2%.  No dollars are assigned to TIP and we add a few more dividend stocks.  Since these are not … [Read More...]

200 Level

Developing a Strategic Asset Allocation Plan

The “Golden Rule of Investing” is to save as much as you can as early as you can.  That simple guideline is fundamental to any investment plan and it is critical to know why the word early is so important.  What comes second (portfolio planning) is also important, but it cannot be implemented unless one has saved money for investing. In this post, we assume the reader has a … [Read More...]

Portfolio Performance: 20 May 2011

While nearly every updated portfolio lost a little ground in absolute terms, all gained when compared to either the customized ITA Index, the Vanguard Total Market Index Fund (VTSMX), or one of the two uncertainty or risk ratios.  Absolute terms means that the Internal Rate of Return (IRR) of the portfolio declined.  While this is important, the relative measurements are more significant … [Read More...]

400 Level

Potential Risk Reduction Moves For Einstein Portfolio Analysis

As a precursor to the review for the Einstein Portfolio due tomorrow, what moves, if any, are likely.  Keep in mind that the Einstein is not one of the five portfolios in the ITA Risk Reduction model experiment.  Nevertheless, we don't want to stand by and lose capital. … [Read More...]

Risk Management: Benefits of the ITA Risk Reduction Model

Platinum members who employ the ITA Risk Reduction model will find the following guidelines of interest.  When your portfolio comes up for review, and I recommend using a 32-Day review period, run through a number of steps.  Before I get to the steps, here are the reasons for selecting the 32-Day interval. It slowly rotates the review through the month rather than always having it occur at the … [Read More...]