100 Level

How Does ITA Wealth Management Differ From Other Investment Blogs?

Photograph:  One of many sail boats returning to the Amsterdam harbor after a day of racing. How is ITA Wealth Management unique?  What are the attractions and special features of ITA Wealth Management?  Why should anyone consider taking out a Platinum membership?  Listed below are a few reasons for following this blog. Working portfolios are tracked at ITA Wealth … [Read More...]

Five Wiley Investment Books

There are five Wiley investment books that should be on every bookshelf.  Consider these five volumes to be your key references for successful investing.  Actively use them.  Here are my recommendations, in no particular order. The Investor's Manifesto by William J. Bernstein The Power of Passive Investing by Richard A. Ferri Millionaire Teacher by Andrew … [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...]

Analysis of Submitted Portfolio

The following list of tickers and associated percentages were submitted for analysis.  I made a few changes that may have a small impact on the projected outcomes.  For the bond allocation I am using BND as the holding.  For cash I used TIP, not an exact, but reasonable replacement.  TIP actually gives the portfolio a return boost. The analysis was cut to something under three years as a number … [Read More...]

200 Level

Asset Allocation and Benchmarking Portfolio

A few days ago I read the following comment.  I did not question the reasoning behind this statement.  "Calculating return is relatively pointless if you are investing in indices." While the point of not calculating the portfolio return may make sense for the investor who selects one or two broad index funds for their complete portfolio, it lacks sound reasoning for … [Read More...]

Will I Run Out of Money Using the Ivy 5?

Ivy 5 Portfolio and Retirement Following up on the quantitative approach to managing portfolio uncertainty, I'll update the Ivy 5 portfolio as referenced in Mebane T. Faber and Eric W. Richardson's book, "The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets." [Open up blog entry for book link to work properly.]  On page 75 of their book, Faber and … [Read More...]

400 Level

What Is A Good Sortino Ratio?

Before answering the above question, one needs to know what the Sortino Ratio is measuring.  Here is the Wikipedia definition.  To keep this idea as simple as possible, write down the equation, S = (R - T)/DR.  S = Sortino Ratio. The R is the Internal Rate of Return (IRR) for the portfolio.  If you are using the TLH Spreadsheet*, the IRR is calculated for you by the Excel™ SS. T is the … [Read More...]

Risk Reduction Model Check

Readers using the ITA Risk Reduction Model with one or more portfolios, keep a check on the key eight asset classes.  The ETFs I use are as follows:  VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  All are commission free ETFs for TDAmeritrade customers. … [Read More...]