100 Level

Passive Management: A Tight Definition

Passive Management carries many meanings so I leave it to Harold Evensky to straighten us out as to what is meant by Passive Investing. In his excellent book, "Wealth Management" he provides this crisp definition. "Passive Management is the antithesis of active management. Its core philosophical tenet is that by brains, hard work, and technology, a manager cannot, over time and net … [Read More...]

Overcoming Fear of Investing

Conquer Fear of Investing   Investing is a deep mystery and I am completely lost. Are you lost or just not interested?  In either case, start simply. Read the Beginning Investors posts found in the Categories section on the right sidebar. I'm afraid I will lose money. Don't jump into the market with all your savings.  Dollar cost average and invest a modest sum every month … [Read More...]

300 Level

Mosaic Portfolio Lookback – 31 March 2009

Here we are in the depths of the bear market on March 31, 2009.  What signals or information come out of a QPP analysis and what is the Delta Index worksheet showing us?  Look over the QPP analysis carefully and see if you spot any unusual signals. The historical data does not look good, but the projections for return and standard deviation are about average.  We have not seem too … [Read More...]

Retirement Planning: Stress Testing a Simple 5 ETF Portfolio

As mentioned in a recent post, stress testing the portfolio is one useful method of checking to see if there will be sufficient funds available to comfortably retire.  In this QPP analysis of a simple five ETF portfolio we will make some initial assumptions that will vary from investor to investor. Assume this investor is 50 and plans to retire at age 67.  The current portfolio is … [Read More...]

200 Level

Index vs. Passive Investing

Harold R. Evensky, in his Wealth Management: The Financial Advisor's Guide to Investing and Managing Client Assets book, makes a distinction between index and passive investing.  The distinctions can be found at this location.  Few readers are unaware of the differences between active and passive management, but the subtle definitions between index and passive management deserves some … [Read More...]

Sixteen Asset Classes: The Basic Portfolio

More Asset Classes Are Not Enough TLH Spreadsheet users are familiar with the sixteen (cash is excluded) asset classes used with most of the larger ITA Wealth Management portfolios.  Below is what I call the Basic Portfolio as standard ETFs are used to populate the different asset classes. Despite all the asset classes being populated with nearly equal percentages, there is something … [Read More...]

400 Level

Momentum-Optimization Analysis of Equity Oriented Portfolio

Momentum-Optimization Analysis In the prior blog post I analyzed a sample portfolio using Quantext Portfolio Planner (QPP).  In this analysis I will use the momentum-optimizer spreadsheet to come up with the efficient frontier, a ranking of the securities, and the "decision maker," a Buy-Hold-Sell recommendation table.  We first take a look at the efficient frontier graph to see where the current … [Read More...]

International “Delta Factor” Projections

Responding to a request to show the "Delta Factor" projections for international ETFs, here we have a much more interesting set of results.  As the reference for DF projections, I use EFA, the international iShares ETF. The following material is not available for publication elsewhere on the Internet. … [Read More...]