100 Level

Which ETFs To Use When Constructing A New Portfolio

Which ETFs do I recommend for different asset classes when putting together that first portfolio?  The first move is to decide which asset classes to use.  Twenty-five months ago I posted this Asset Allocation blog and little has changed over that time.  One error in the table is the position of VEA.  That ETF should be included in the Developed International Equities box rather than the Emerging … [Read More...]

Gems from “The Power of Passive Investing”

Passive Investing Gems Taylor Larimore extracted many gems from Rick Ferris' latest book. I pulled this material from the Bogleheads web site.  The link back to where I got this material can be found here. You may need to register to see this material. To find more Larimore gems, as extracted from other investment books, go to this site. This post is an effort to spread the news of the … [Read More...]

300 Level

QPP Analysis of Kenilworth

As a follow up to the update of the Kenilworth, below is a Quantext Portfolio Planner (QPP) analysis of the current holdings. When running a QPP analysis under the current market conditions, inflation is set at 4.0% and the S&P 500 is assumed to grow at 7.0% over the next six to twelve months.  An "ideal" portfolio will see the projected return exceed 8%, projected standard … [Read More...]

Preservation of Principle

Tactical Asset Allocation for Newton Portfolio Holding on to the nest egg were my marching orders.  I did not stand in the way of these instructions for the Newton Portfolio.  With the market climbing as it has since early 2009, moving into cash makes some sense.  In an attempt to preserve capital, numerous trades took place in March and early April.  Selling off some asset … [Read More...]

200 Level

Response to “The Trend is Your Fickle Friend” Article

If you have been reading the Comments on this blog you saw the reference to the Hussman Funds article, "The Trend is Your Fickle Friend."  After reading the article I concluded that my response would be too long for another comment, so I decided to give attention to the article with a full blog post. In the early part of Hussman's article, he points out the problems associated … [Read More...]

Maximizing The Return/Risk Ratio

I spent much of the morning working on optimizing numerous sets of ETFs until I came up with the following array of investments.  This sample portfolio consists of the ETFs used in many ITA portfolios.  Knowing that individual stocks bring diversity to most portfolio, I "Googled" for the five highest yielding dividend aristocrats.  To make sure I have the top five, I would need to confirm with … [Read More...]

400 Level

Retirement Ratio: Portfolio Performance and Uncertainty Measurement

What is the Retirement Ratio (RR)?  I never heard of such a ratio, at least as it is defined below.  Before going into an explanation, let me digress and address similar ratios.  Portfolio performance measurements that combine both return and risk are readily available to investors.  The Sharpe ratio is perhaps the best known "efficiency ratio" where it measures the … [Read More...]

Adding SDS to Reduce Portfolio Uncertainty

Another risk reducing card to use with the ITARR model is the ultra-short ETF, SDS.  By allocating 10% of the portfolio to SDS, we make a significant difference in breaking the back of portfolio volatility.  While the projected return is lower, take note of the dramatic increase in both the Return/Uncertainty ratio and the Diversification Metric (DM). … [Read More...]