100 Level

Constructing Your First Portfolio

Faced with the task of building a portfolio from scratch, what are the first steps?  Assume one saved a bit of money, read a few of the Top Ten Investment Books, and is convinced of the wisdom of index investing. Read the following questions and answer them as best you can.  Don't be fearful of making a mistake or feel these decisions cannot be reversed.  Not only can you change them, I … [Read More...]

Portfolio Construction

  With the advent of commission free ETFs, TDAmeritrade made it simpler to construct a portfolio.  Readers can watch the slow development of the Kenilworth Portfolio as an example.  Once you have selected the 10 to 15 asset classes, just "stair-step" the building process into a robust portfolio.  Here are my thought processes as to how to assemble a portfolio. … [Read More...]

300 Level

Quantext Portfolio Analysis Of The Swensen Six Portfolio

Quantext Portfolio Planner is a software program I use as an aid in portfolio construction and analysis.  In earlier blog posts I performed a QPP analysis on both the Faber Ivy Five and Faber Ivy Ten Portfolios. The following QPP analysis covers only the basic "Swensen Six" portfolio.  In another article I showed how to give a dividend boost to the Swensen Six.  Looking … [Read More...]

Newton Portfolio Review: 6 October 2011

While it is a little early to update the Newton Portfolio, shares of NLY were purchased and shares of SDS were sold this week.  Those changes did little to change the asset allocation as shown in the Dashboard worksheet below. … [Read More...]

200 Level

Portfolio Performance Update: 19 May 2012

Several weeks flitted by without a portfolio performance update.  Here is the latest information (see data table below) after what we might categorize as a miserable stock market week.  The ITA Risk Reduction model is working!  It is doing exactly what it was designed to do - reduce portfolio risk while increasing relative return.  However, it is still too early to gloat, but … [Read More...]

Asset Allocation: How Important Today?

Asset Allocation Due to a recent Ibbotson study (Unfortunately, this article now requires one to register.) asset allocation is not the investment elixir today it was thought to be in the late 1980s and 1990s. Nevertheless, it remains the best method for constructing portfolios if our goal is to outperform a broad market benchmark index such as the VTSMX while reducing portfolio risk. Readers of … [Read More...]

400 Level

Examining Critical Risk Reduction ETFs

This is examination day for the Maxwell Portfolio and the market is in a swoon.  A few minutes ago I look at the "Critical Eight" ETFs and they are: VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  All are still priced above their 195-Day EMA, but some are getting close to crossing the EMA line.  For this reason, I will be waiting for the market to close before I make any … [Read More...]

Bullish Percent Indicators Show Markets Continue to Weaken

Bullish Percent Indicators (BPI) provide us with a broad look at large index and sector movements for the U.S. Equities market.  While I do not use either the index or sector tables as trading tools, I do watch them for general market trends and as guides to determing when the market is over bought or over sold.  Right now the market is over bought and weakening. Index BPI:  One significant … [Read More...]