100 Level

The Asset Allocation Decision

  There are researchers who conclude that the asset allocation plan is the most important decision an investor will make when constructing a portfolio. It is my contention that the percentage allocation to the asset classes is the most critical decision. The most recent research I've read on this subject indicates that asset allocation is important, but not quite so important as stated … [Read More...]

Manage Your Own Money

  Should you hire a money manager or do it yourself?  Consider the following assumptions and arguments. 1.  As the first given, the portfolio belongs to you, not the hired money manager.  This is an obvious, yet important point. 2.  Assume the advisor fees amount to 100 basis points or 1%.  Fees may be lower, but for ease of calculation, I will use the 1% … [Read More...]

300 Level

ITA Index: Making It Work

Building a Customized Benchmark Serious investors monitor and measure the performance of their portfolio(s).  Otherwise, how is one to know if portfolio decisions are adding or subtracting alpha.  Portfolio decisions include market timing, asset allocation, selection of stocks, index funds, ETFs, mutual funds, and professional money managers.  Measuring performance is a … [Read More...]

Newton Portfolio Update: 19 October 2011

Extracted from the TLH Spreadsheet is the Newton Dashboard shown below.  In the white background are the Strategic Asset Allocation percentages for the different asset classes.  Numerous asset classes are still out of balance as I attempt to bring the portfolio back within the 20% threshold limits.  I'm not in a hurry to do so as ETF prices are frequently below their 195-Day … [Read More...]

200 Level

American Workers Unprepared

ITA Wealth Management is not so much a blog of how to make money as it is a blog to help investors achieve retirement goals.  According to recent Department of Labor statistics on retirement sufficiency, U.S. workers retiring in the 2050s will have saved only enough in their 401(k) accounts to replace an average of 22% of their pre-retirement income.  What is staggering is that 37% will have no … [Read More...]

Requesting Yield To Exceed 3.0%

This morning I had an article published over on Seeking Alpha.  One reader requested what would happen if one of the constraints was to seek a yield of 3.0% or higher.  Below is the Optimization Analysis that meets this request when using the 16 ETF portfolio. The add link function does not seem to be working this morning so below is the URL to the SA … [Read More...]

400 Level

Maxwell Portfolio Examination: 5 May 2012

Tomorrow, May 6th, is the official day to update the Maxwell, but nothing is going to happen over the weekend so here is the May review of this portfolio.  Platinum readers know that the Maxwell is one of the five model portfolios for the ITA Risk Reduction experiment.  Below is the current Dashboard for the Maxwell. … [Read More...]

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...]