100 Level

Swensen Six and Faber “Ivy Ten” Portfolios

Two model portfolios to consider using are those recommended by David Swensen, chief investment officer of Yale University and author of Unconventional Success, and Mebane Faber, portfolio manager at Cambria Investment Management and co-author of The Ivy Portfolio.  While Faber's book focuses on Ivy League portfolios, there are differences in the make up of the portfolios recommended by … [Read More...]

Grandchildren: Rebalance Portfolio When Necessary

Keep the different asset classes within 25% of the target set up in the Strategic Asset Allocation plan.  In the little book, "The Investment Answer," rebalancing is the fifth critical decision for investors.  In my opinion, rebalancing is one of the minor hints of investing, particularly if new money is coming into the portfolio.  Just keep purchasing ETFs that represent … [Read More...]

300 Level

Momentum-Optimization Analysis of Stock Portfolio

If you have not read the QQP analysis of this set of stocks, do so before reading this blog.  Here is the link to the Quantext Portfolio Planning analysis.  While the QPP analysis provides a probability projection of what one might expect over the next six to twelve months, the following analysis shows where the current portfolio is positioned with respect to an optimized portfolio.  In other … [Read More...]

Recent Piotroski Stocks

Platinum members following the Gauss Portfolio are aware that I have been adding "Piotroski Stocks" to this portfolio if any met all nine standards.  The stock is then held so long is it maintains a ranking of seven or higher.  The two stocks recently added to the Gauss were CRAI and PFIN.  Currently, only CRAI should be in the portfolio as it still carries a ranking of nine (9).  PFIN dropped … [Read More...]

200 Level

Schrodinger Portfolio Review: 3 July 2012

Passive is the key word when it comes to managing the Schrodinger Portfolio.  No transactions occurred over the last several months except to add dividends to the cash account.  All asset classes are in balance as shown in the following Dashboard worksheet.  We use sixteen asset classes in this portfolio as I have never added international bonds to the mix. … [Read More...]

What Are The Disadvantages of Index Funds?

This morning I noticed a reader was searching for disadvantages associated with index funds, so I decided to do a little internet searching to find some of the drawbacks, if any.  As soon as one delves into this question, up pops the issue of passive vs. active investing.  Here are a few resources I located that deal with the question - are there disadvantages to using index funds?  I include … [Read More...]

400 Level

Fama & French – Value Risk Factor

  Sculpture on Main Sacred Way to Ming Tombs Fama-French’s value risk factor is at the heart of their paper, The Cross-Section of Expected Stock Returns.  This link connects you to an abstract of their paper.  It takes someone like William Bernstein to explain the research study and its importance.  Let me quote from "The Intelligent Asset … [Read More...]

Stress Testing the Kepler Portfolio

Next week the Kepler Portfolio is up for review.  In advance of that update I am running what I call a "stress test" assuming this to be your retirement portfolio.  Given a set of assumptions laid out in the first slide, would this portfolio last through retirement? Here we have a 40 year-old who plans to retire in 2040 at age 68.  Having already saved $200,000 and planning to put away another … [Read More...]