100 Level

Retirement: Five Asset Class Portfolio

  Five Asset Class Retirement Portfolio If you think many of the portfolios discussed on this blog are overly complicated, try this five asset class portfolio on for size and see if it meets your needs. This portfolio is only slightly more complicated than the "Second Grader" portfolio Allan S. Roth writes about in his book, "How a Second Grader Beats Wall Street." I thought I'd written a … [Read More...]

Grandchildren: Live Below Your Means

  If you have been reading my Grandchildren suggestions, you will note thus far all come under the general category of discipline.  Learn to live a disciplined life and suggestion number three (3) is no different.  Live below your means.  Income must exceed outflow. Spend less than you earn and "spend" on your retirement fund. Defer immediate gratification. I recall … [Read More...]

300 Level

Asset Allocation for Small Global Portfolios

If your portfolio is small and yet you want global diversification, this portfolio is one to consider.  This six asset class portfolio is built around asset allocation guidelines laid out by David Swensen in his book, "Unconventional Success."  Thirty percent of the portfolio is allocated to U.S. Treasury Bonds (TLT) and TIPs (TIP).  Domestic REITs are covered with the VNQ … [Read More...]

Harry Browne’s Permanent Portfolio

Risk-Parity Look at Permanent Portfolio Much is written about Harry Browne's Permanent Portfolio, particularly since it held up well during the "Black Swan" markets of the early 21st century.  Below is a look at the equal allocation plan as advocated by Browne, and a Risk-Parity examination of the same four asset classes.  Both the equal allocation and Risk-Parity … [Read More...]

200 Level

Positioning the Maxwell, Euclid, and Madison

In preparation to launch the ITA Risk Reduction model for the Maxwell, Euclid, Madison, and possibly one or two more portfolios, the basic asset allocation is laid out below.  SDS is shown only as a possibility in unusual circumstances.  The percentages as shown apply only when the ETF price lies above its 195-Day Exponential Moving Average (EMA).  Such is not the case right now as … [Read More...]

Searching for the Strategic Asset Allocation Holy Grail

Establishing a strategic asset allocation (SAA) plan for a portfolio requires at least two major decisions.  1) What asset classes should be included in the portfolio.  2) What percentage of the total portfolio is allocated to each asset class.  Decision number two is the more difficult of the two.  Where do I come up with the various asset allocation plans found in the various … [Read More...]

400 Level

Bullish Percent Indicators: 3 November 2012

A few more changes developed this past week in both index and sector Bullish Percent Indicators.  In some cases the market strengthened while in others it weakened.  As you look over the tables, ask yourself if you see any particular trends. … [Read More...]

Passive vs. Active Investing

Why do large endowment funds use a passive investment strategy? Is it due to fund size and their portfolios are so large they mirror the market? Again, quoting from my “Active vs. Passive” paper, we have the following. “An estimated 40% to 50% of all institutional monies are in index or passive portfolios while only 3% to 4% of retail investors make use of passive strategies. … [Read More...]