100 Level

Avoiding Losses

How does one avoid major losses to the portfolio? Here are the two simple Faber - Richardson rules. … [Read More...]

Multi-Asset Class Investing

Multi-asset class investing or multiple asset classes is a title that comes right out of Richard A. Ferri’s excellent book, “All About Asset Allocation.” While my reference is to Ferri's first edition, I would pay the few extra dollars and purchase the second edition.  Nudged by a fellow asset allocation investor, I went back and reread Chapter 4 of Ferri’s book. … [Read More...]

300 Level

Preparing For Kepler Update

Tomorrow is the scheduled date for the Kepler review.  In preparation for this occasion I ran a Hoadley-HedgeHunter analysis of the Kepler to see what recommendation cropped up as a result of the Momentum-Optimization (MOM) model.  The first look is the efficient frontier as displayed below. Efficient Frontier:  As a result of transactions this morning, the current portfolio (diamond dot) moved … [Read More...]

Bohr QPP Projections

Using current ETF percentages held in the Bohr Portfolio, what are the Quantext Portfolio Planner (QPP) projections indicating for the next several months?  The S&P 500 is assumed to grow at 7.0% over the next year.  In the prior blog post, I showed the Efficient Frontier graph, and it presents a somewhat defensive portfolio.  This QPP projection shows much the same expectation going … [Read More...]

200 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...]

Stop Drinking Your Retirement

Practicing Self-Discipline This week I was in a meeting and to no surprise I witnessed at least one participant drinking bottled water. I kept quiet as it made no sense to offend anyone, but it did not stop me thinking - suppose one drank from the tap and saved the difference? What would that saving amount to over a lifetime? A quick calculation can be found at this bottle calculator site. It is … [Read More...]

400 Level

Modifying the Faber Global Tactical Asset Allocation Model

As mentioned in the last blog, I highly recommend ITA readers take the time to download and read Mebane Faber's article, A Quantitative Approach to Tactical Asset Allocation. This blog entry explains a number of modifications or variations to the "Faber Model."  Faber uses five asset classes in his Global Tactical Asset Allocation model and they are as follows. U.S Equities or Stocks  -  … [Read More...]

Bullish Percent Indicator Update: 23 March 2013

Both broad markets and sectors of the market weakened this past week.  Not by much and the downward trend was not 100%, but Platinum members will see that the majority of the recorded values declined. … [Read More...]