100 Level

15-Stock Diversification Myth

Diversification Myth Debunked   How many stocks does it take to eliminate portfolio risk?  The number 12 to 15 often crops up.  If that is too few, then maybe 20 to 30 will do.  This number has also come under fire, particularly in a world economy where U.S. companies no longer make up the majority of available companies and our economy is shrinking as a percentage of the … [Read More...]

Easy Investing

While few stock pickers are successful investors, the index investor or a passive oriented investor can do better than the majority of stock market participants by following a few simple rules.  One of those rules is simply - Don't build your portfolio by picking individual stocks.  Use index funds or index ETFs.  Investors saving small amounts of money each month are better off … [Read More...]

300 Level

Dividend Oriented Stocks Are Limited Under The Latest Screen

Dividend Stocks of Interest From time to time I will post a few stocks for Platinum members interested in spicing up their portfolio.  While it is difficult to build a portfolio using only stocks and have that portfolio outperform the stock market over the long run, it is possible to pull down portfolio risk by adding companies that have a low correlation with the broad market.  … [Read More...]

My Portfolio Is Performing Great. Really? How Do You Know?

One comment I frequently hear when folks talk about investments is the following. "My portfolio is performing great." This statement conjures up questions I rarely ask as it tends to put the investor on the spot. Here are a few question that run through my mind. Performing great with respect to what? When was the portfolio launched? Is the portfolio return calculated by an acceptable … [Read More...]

200 Level

ITA Portfolio Performance: 28 January 2012

What a great week for the eleven ITA Wealth Management portfolios!  All showed both absolute and relative positive performance returns.  Every portfolio gained ground on the VTSMX benchmark.  The simple reason is due to rising prices in developed international markets (VEU), emerging markets (VWO), and international REITs (RWX).  In other words, our globally diversified … [Read More...]

Retirement Rule #5: Understand Employer Retirement Plan

Assuming your employer has established a retirement plan and you are taking advantage of it, there is still another important step in the process.  It is essential you know something about the plan, particularly what options are available for investing.  It is not unusual for a mutual fund family to work out an arrangement with a company to provide a variety of actively managed mutual funds for … [Read More...]

400 Level

ITARR Using Current Data

Platinum readers following the ITA Risk Reduction (ITARR) model will note that all key ETFs are currently flying beneath their 195-Day Exponential Moving Averages.  At the end of the month we will take a look at all positions to see what moves to make in early December.  Don't be surprised to see a rebound tomorrow. If new readers are unfamiliar with the ITARR model, search the term … [Read More...]

Portfolio Risk: Advantages of Semivariance

Semivariance: Preferred Risk Measurement Portfolio risk is given lip service, but rare is the investor who takes pains to actually measure the risks involved in the makeup of their portfolio. It is common to hear an investor indicate they have a well-diversified portfolio if it is made up of more than 15 to 20 stocks. The correlation between the investments might be a mystery, yet the claim is … [Read More...]