100 Level

Diversify – Diversify – Diversify

If you have questions why the portfolios tracked here at ITA Wealth Management include so many asset classes, just read the referenced article, “The Benefits of Low Correlation.” After reading this article, I had second thoughts about allocating only 5% to commodities. However, 5% should be adequate due to our emphasis on value and small-cap stocks as well as participating in … [Read More...]

Six Asset Class Portfolio

Adding REITs to the three essential asset classes plus treasury (TLT) did not improve the projected Return/Uncertainty ratio as expected.  However, we are not about to eliminate REITs as an asset class.  There were periods over the last eleven years when REITs provided a buffer to a very volatile market. What happens if we reduce the percentage allocated to REITs and add a commodities … [Read More...]

300 Level

Dividend Stocks for Adding to Core ETF Portfolios

Investors interested in adding a few highly selected individual stocks to their portfolio will find the following dividend aristocrats and "Piotroski" style investments of interest.  First, the dividend stocks.  … [Read More...]

“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...]

200 Level

Portfolio #2: Ages 26 – 35

Portfolio #2 adds a few more ETFs and gives up nothing in performance.  In fact, the projected standard deviation (portfolio uncertainty) drops from 20.1% to 17.6%.  Diversity is increased from 8% to 29% and the Portfolio Autocorrelation drops two percentage points. … [Read More...]

Retirement Portfolio: Part Two

As pointed out in this blog post, one first selects asset classes for a retirement portfolio.  Then comes the difficult part of selecting what percentage to allocate to each ETF or asset class.  Below is a basic allocation that is not optimized.  In a later post I will run through an optimization of this set of ETFs to see if the projected return can be enhanced and still lower projected risk. … [Read More...]

400 Level

Performance of “Ivy Portfolio”

Platinum members who have been following the development of the ITA Risk Reduction model know that I based the ITARR system on the model laid out in Faber and Richardson's book, The Ivy Portfolio, and a modeling system I used back in the 1980s when I was co-authoring an investment newsletter.  ITA readers using the ITARR model will find the following link of interest. … [Read More...]

Broad Market Outlook Based on Bullish Percent Index

Based only on gut feeling, most of us would expect rather good numbers to show up this week when we drill down into the Bullish Percent Index values for the major indexes and individual sectors.  The following two tables will not be a surprise if this is your impression of the trading week just passed.  First, the major markets. Index BPI:  All indexes showed a slight uptick in the actual … [Read More...]