100 Level

Broad Market Outlook Beginning to Show Cracks

As anticipated for a number of weeks, the broad U.S. Equities market is showing the first signs of cracking.  The following Bullish Percent Indicator tables provide the evidence. The following information is not available for publication elsewhere on the Internet. Broad Index BPIs:  All major indexes are now controlled by defensive teams as all show O's in the right-hand column when examined … [Read More...]

Stock Market Myths

Brett Arends writes an interesting article, "Ten Stock-Market Myths That Just Won't Die" for the Wall Street Journal Digital Network.  While I agree with nearly all of his ten points, there are a few that need further clarification.  Point #8 focuses on diversification using mutual funds.  I agree with that part of the point, but not the section quoted … [Read More...]

300 Level

ETF Rankings: VNQI for RWX

In the following rankings, I substituted VNQI for RWX as it shows up as a better performer in the international REIT space over the past two plus years.  Otherwise, this is the list of ETFs readers can use to populate their portfolios.  A few things to note.  An international bond (BWX) and a corporate bond (LQD) ETF moved from below to above the performance of SHY.  This is the first I've seen … [Read More...]

Sample Portfolio For Thirty (30) Year Old Investor

The following portfolio was passed on to me by a Platinum member as an example of a Strategic Asset Allocation plan for a thirty year-old investor.  Nine ETFs are used in this portfolio and many of the investment securities are familiar to ITA readers.  In fact, all nine Exchange Traded Funds can be found in one or more portfolios with exception of RWO.  RWO is a global real estate … [Read More...]

200 Level

Asset Allocation: Working With Optimizer

How does one combine the power of the Dashboard and the Hoadley optimizer when it comes to setting up an asset allocation plan for a portfolio.  ITA readers are familiar with the Dashboard as it is shown every time a portfolio is updated.  In this post I will explain how one might combine the Dashboard and Hoadley optimizer.  Since the Hoadley optimizer is confined to nine (9) asset classes, I've … [Read More...]

Active vs. Passive Investing: Part 3

Section Three of the Active vs. Passive paper deals with the non-trivial problem of how to measure portfolio returns.  This is a nasty problem for mutual fund money managers as clients are moving cash in and out of their portfolios at different times.  This cash flow has nothing to do with the managers style of management.  To comply with the Association for Investment Management … [Read More...]

400 Level

Staying On The Right Side Of The Market With A Ten ETF Portfolio

Remaining on the right side of the market is critical to reducing portfolio risk.  Platinum members should be well aware of the ITA Risk Reduction model, our first line of defense.  Remember Faber's axiom that ETFs are more volatile when they are priced below the 200-Day Simple Moving Average.  Here at ITA we use a faster EMA, but the difference is not significant and the … [Read More...]

ITARR Working As Planned

When the ITA Risk Reduction model was instituted several months ago, the logic behind the plan was to take a few portfolios that were lagging their benchmarks and see if there was a way to turn that situation around.  So long as the market was moving up and the prices of the various ETFs never dipped below their 195-Day EMAs, I did not expect to see much change in the Internal Rate of Return … [Read More...]