100 Level

Four Security Portfolio

The following four security portfolio was recommended for testing by a Platinum member.  FTIIX was substituted for other index funds as the first and second choices did not have sufficient historical data for the Quantext Portfolio Planner (QPP) analysis.  The following screen shot shows the projections for VTI, VEU, BND, and FTIIX. QPP Analysis:  One quick observation is the lack of … [Read More...]

Keep It Simple: And I Mean Really Simple

Yesterday I was discussing Hedrick Smith's new book, Who Stole the American Dream, with a relative and we talked about how ill prepared Americans are for retirement.  Part of the discussion focused on some new information where I learned a group of workers in a well-known institution had an average of $50,000 saved in their 401-k plans.  Can you imagine going into retirement with so little saved?  … [Read More...]

300 Level

Asset Allocation: Medium-High Risk Portfolio

This is the fourth portfolio in this series of relative risk allocation plans based on the data table found in this blog entry.  Note how the projected return is rising, but so is the projected uncertainty.  Return and Risk are highly correlated.  It is difficult to find a combinations of tickers that will increase the projected return while driving down the projected standard … [Read More...]

Maxwell Portfolio Update: 30 August 2013

As a reminder to new members, the Maxwell is one of three portfolios where all the transaction details are not available for viewing. One bit of good news for this portfolio is that over the last three months, or since launching a risk reduction model, the Maxwell picked up 140 basis points with respect to the ITA Index and 10 basis points on the VTSMX benchmark.  While the gain on VTSMX was … [Read More...]

200 Level

Beat The Market

How many times have you heard the phrase, "Beat The Market?" Over a year ago, Mark Hulbert wrote an article on this subject. Here is an important quote from the Hulbert article. If you don't know who Mark Hulbert is, Google his name and learn about his contributions to the field of investing. "Even that, however, underestimates the difficulties of beating an index fund. … [Read More...]

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...]

400 Level

Equity “Delta Factor” Probability Projections

Approximately once a month I publish either the "Delta Factor" probability projections for equity or bond ETFs.  Considering the recent strength in the markets it seemed like a good time to run the analysis again and see if there are any asset classes or ETFs that have a reasonable probability of performing well over the next six to twelve months.  You may be surprised at the … [Read More...]

Portfolio Risk: Advantages of Semivariance

Semivariance: Preferred Risk Measurement Portfolio risk is given lip service, but rare is the investor who takes pains to actually measure the risks involved in the makeup of their portfolio. It is common to hear an investor indicate they have a well-diversified portfolio if it is made up of more than 15 to 20 stocks. The correlation between the investments might be a mystery, yet the claim is … [Read More...]