100 Level

Disadvantages of Passive (Index) Investing: Are There Any?

The arguments in favor of passive investing are far too compelling to completely ignore.  If there are any disadvantages, what are they? 1.  At one time the availability of passive or index funds were limited, particularly in certain asset classes.  Availability of index funds is no longer a problem as ITA readers know.  We can find an index ETF to fill every asset … [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

X-Ray of New Normal Portfolio

From time to time I will run a QPP analysis on a current version of the "New Normal" portfolio, a defensive set of stocks and ETFs.  Below are the screen shots showing the X-Ray analysis for the NN portfolio as determined by Morningstar.  Any comments on this analysis and does this x-ray analysis show this to be a defensive portfolio?  If so, in what ways? … [Read More...]

Sample Portfolio #1

Here is the analysis of a portfolio recently mailed to me.  This analysis is one of the perks that come with Platinum membership.  The first screen shot shows the QPP analysis and the second slide is the correlations of the securities within the context of the portfolio.  Comments are welcome from Platinum readers. … [Read More...]

200 Level

Active vs. Passive Investing: Part 5

The author of the Active vs. Passive Investing Returns: Does Passive Outperform? paper begins Section Five with this statement.  "Other research supporting the conclusion that passive investing outperforms, comes from analysis of pension plan returns.  Although slightly different, pension plans have most of the same problems as mutual funds.  They are only a subset of the … [Read More...]

Swensen Portfolio Plus Dividend ETF VIG

As suggested by one reader, I removed the individual stocks from the Swensen-Six Portfolio and added VIG, a dividend oriented ETF.  Below is the Quantext Portfolio Planner (QPP) analysis, correlation matrix, and "Delta Factor" projections when using five years of historical data.  One big advantage of using VIG instead of several individual stocks is one of simplicity.  … [Read More...]

400 Level

Risk-Parity: Is This Portfolio For You?

A Close Look At A Risk-Parity Portfolio* The idea of risk-parity has been around for a number of years, if not by name, certainly by concept.  Risk-Parity is an alternative method of constructing portfolios.  Instead of building a portfolio around allocation of capital the portfolio is emphasis is placed on allocation of risk.  All eleven portfolios tracked here at ITA Wealth … [Read More...]

Euclid ITA Risk Reduction Update

This was the weekend for the Euclid examination.  Here is a report of what happened.  First, take a look at the current Dashboard for this portfolio shown below.. … [Read More...]