100 Level

Benchmark Requirements

What are the requirements for a proper benchmark? This issue comes up from time to time and I ran across it again in Richard Ferri's book, "The Power of Passive Investing." Here are the requirements, and I quote from his book. … [Read More...]

Modest Portfolio

Portfolio for Advanced and Beginning Investors Return and risk are highly correlated terms when it comes to portfolio construction.  A goal, when running analysis on sample portfolios, is to come up with a Return/Ratio in excess of 0.60.  A second goal is to seek diversification so the Diversification Metric exceeds 40%.  That goal floats as market conditions change.  A third … [Read More...]

300 Level

Benchmarking The Portfolio

Establishing an appropriate benchmark for a portfolio is essential if one is serious about investing.  Avoiding portfolio benchmarking is an act of self-deception, but all too common with the average investor.  Exactly what is the purpose of a benchmark and what are the requirements for a fair and reasonable benchmark.  Here is one definition of benchmarking. In the investing … [Read More...]

What Happens When We Substitute VYM For Individual Stocks

The question was raised in a comment - What if one uses VYM instead of the six individual stocks as recommended in the Seeking Alpha article?  Using the same 60 months of historical data for the analysis and the same projections for the S&P 500, below is the QPP analysis where 18% is allocated to VYM as a substitute for the six individual stocks. The projections are not as strong when … [Read More...]

200 Level

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...]

Performance of Portfolios: 23 December 2011

Portfolio Performance Data Once more, the ten portfolios had a good week in an absolute sense, but most gave up some gains when measured against the VTSMX benchmark.  The numbers are telling me that the U.S. Equities market is stronger than the international markets.  Global exposure is a drag on these portfolios as we hold EFA, EPP, VEU, VWO, and RWX.  When updating the values, … [Read More...]

400 Level

Bullish Percent Indicators Shift Into High Gear

Both the broad markets and individual sectors went on a tear this past week based on the Bullish Percent Index (BPI) changes.  Platinum members will see the results of the various indexes in the first table and the individual sectors in the second. The following information is not for publication elsewhere on the Internet. … [Read More...]

“Delta Factor” Update: October 27, 2011

Equity ETF Performance Projections Based on popular demand, here is another "Delta Factor" update of the equity ETFs we use to populate our portfolios.  New readers to ITA Wealth Management would do well to search the blog for other "Delta Factor" posts.  A quick explanation is that the "Delta Factor" and "Conservative Delta Index" columns are … [Read More...]