100 Level

Portfolio Construction: Asset Allocation Percentages Are Vital To Success

 Photograph: Fisherman in Greek Islands   This Blog is dedicated to helping the beginning investor build and monitor a portfolio.  Here are a few of the basic guidelines. Skew the portfolio toward small-cap ETFs and play down large-cap ETFs.  Evidence for this shows up in the Portfolio Performance data tables. Emphasize value over growth as value outperforms growth … [Read More...]

Taxes: Prepare to Harvest Losses

It is not too early to think about capturing tax losses for 2010. We still have a few weeks before we need to make final decisions, but I would at least identify those stocks, index funds, or ETFs that are potential sell candidates. If you are using the TLH spreadsheet to track your portfolio, the information is easy to access. All one needs to do is examine the IRR, assuming you have not moved in … [Read More...]

300 Level

Conservative Portfolio

Below is the QPP analysis of a portfolio suggested by an ITA reader. The portfolio is made up from a wide array of index funds and ETFs.  The projected return of 4.44% immediately indicates this is a conservative portfolio as it is projected to return 2.6% below that projected for the S&P 500.  The projected standard deviation is also low at 8.1%, and the Risk/Volatility ratio at … [Read More...]

Euclid Portfolio Update: 14 March 2013

Since the last review of the Euclid 32 days ago, shares of VO were sold and GTU was added to the portfolio. Platinum members are able to see the current Dashboard and Efficient Frontier in the following screenshots. … [Read More...]

200 Level

Rule #9: Understand Benefits of Social Security

Rule #9 is to understand the benefits of Social Security (SS).  This logic is based on the assumption SS will be operational for years to come.  To make this possible, all congress needs to do is write one line of code into law.  "Remove the cap from Social Security and do nothing else."  That will save SS for those most in need of this leg of the retirement stool.  The other legs are represented … [Read More...]

Portfolio Performance: 13 April 2012

Although the individual portfolios declined in value since the last update, all gained ground when compared to the IRR VTSMX benchmark.  In most cases, the difference between the Internal Rate of Return (IRR) of the portfolio and the IRR for the ITA Index remained the same.  In a number of portfolios, the Sortino and Retirement Ratios dropped a fraction of a point. Click on title to … [Read More...]

400 Level

Portfolio Risk: How To Manage It With Care

Managing Portfolio Risk* Risk is one of the least understood concepts when it comes to investing, so it is time we insert some discussions into the mix of portfolio construction. I am going to quote Mark Hebner and link to his outstanding web site frequently as he does an excellent job of describing and defining risk. Let us first begin with a definition of Standard Deviation (SD) as it is … [Read More...]

Equity “Delta Factor” Projections

The following screen shot shows the "Delta Factor" projections for twenty ETFs, many found in most of the ITA Portfolios.  These are equity ETFs as I did not include any bond or treasury ETFs in this analysis.  When one sees a yellow background in the Delta column, that is a semi-positive signal.  The best signal would to see a green background.  There are none at … [Read More...]