100 Level

Setting Up a New Portfolio

Whether one is a beginning or experienced investor, a respectable portfolio can be constructed using the following 27 ETFs.  These ETFs are available commission free to TDAmeritrade clients.  While there are 27 ETFs available, it is not expected all would be part of the portfolio at any one time.  Currently, only 13 ETFs are recommended with the current conditions. This material is not … [Read More...]

Putting It All Together: Portfolio Construction

David Swensen writes in his "Unconventional Success" book, "Construction of a financial-asset portfolio involves full measures of science and art.  The science encompasses the application of basic investment principles to the problem of combining core asset classes in an efficient, cost-effective manner.  The art concerns the use of common-sense judgment in the challenge … [Read More...]

300 Level

“Creme List” for 4/1/2011

This is no fools list of interesting companies, even though we are not advocates for building portfolios through the process of stock selection.  Only 17 stocks made the list this week.  Three companies were culled from the list since they have not scored over the last 13 weeks.  Those eliminated were: FDO, MMM, and T.  One new company is back on the list after many weeks of … [Read More...]

Asset Allocation Changes In The Madison Portfolio

With a number of asset classes below target, since dollars are on the sideline in cash, now is the time to rework the Strategic Asset Allocation plan of the Madison Portfolio.  The following Dashboard is a move to emulate the "Swensen Six" portfolio without adding individual stocks. … [Read More...]

200 Level

Smartest Medium-High Risk Portfolio

With this analysis of the medium-high risk portfolio, we leap over the medium risk portfolio found at this site. The medium-high risk portfolio limits the bond/income asset class to 20%.  Remember, we began with 80% allocated to the bond asset class, moved to 60%, then 40% and now 20% or something similar to what we hold in many portfolios tracked here at ITA Wealth Management. Note the … [Read More...]

Hedging the Simple Seven ETF Portfolio

In the last blog entry yesterday, I proposed a simple seven ETF portfolio that generated a Return/Uncertainty ratio of 0.57.  This is very close to our baseline of something greater than 0.60.  In the following portfolio, assume one sold off the 10% holding in VTI and shifted those assets over to the ultra-short SDS ETF.  There needs to be some reason for making the shift, but for … [Read More...]

400 Level

Bullish Percent Indicators: Mixed Reactions To Financial Cliff

While there were no major offensive-defensive shifts in the major indexes, there were a few changes within sectors of the market. The following data tables provide detailed information on the changes. Bullish Percent Indicators for Indexes: Both the NYSE and DJIA indexes improved numerically this past week although neither index showed sufficient strength to move from a defensive position to an … [Read More...]

How Important Is Portfolio Risk or Portfolio Uncertainty?

The Importance of Managing Portfolio Uncertainty If 2008 taught us one lesson it is that portfolio risk is just as important as portfolio return. In the following analysis I want to examine some of the risk details of the Passive Portfolio (PP) or the Schrodinger Portfolio. At the end of 2007, this portfolio had a value of $234,160 and by the end of 2008, one year later, the value dropped to … [Read More...]