100 Level

Risk-Parity: A Brief Explanation of How Risky a 60/40 Portfolio Really Is

While I have a sample Risk-Parity portfolio coming out early tomorrow morning, I want to rush out a brief description of how risk is calculated.  This not for the mathematically squeamish, but the concept is not difficult if one can get past one step in the logic.  Don't be surprised if this concept does not alter how portfolios are put together here at ITA Wealth Management.  … [Read More...]

QPP of Aggressive Portfolio

Back on January 18, 2012 I posted a table showing asset allocation plans that ranged from low risk to very aggressive portfolios.  At that time I posted a Quantext Portfolio Planner (QPP) analysis of the low medium-risk portfolio.  A Platinum member requested a similar QPP analysis of the high risk or aggressive portfolio.  Below is the analysis. QPP Analysis of High Risk Portfolio:  The … [Read More...]

300 Level

Newton Portfolio Update: 19 October 2011

Extracted from the TLH Spreadsheet is the Newton Dashboard shown below.  In the white background are the Strategic Asset Allocation percentages for the different asset classes.  Numerous asset classes are still out of balance as I attempt to bring the portfolio back within the 20% threshold limits.  I'm not in a hurry to do so as ETF prices are frequently below their 195-Day … [Read More...]

Growth: Portfolio #5

Moving one step closer to increasing the projected return, this post is about the Growth Portfolio, number 5 out of 6 in this series.  Bond and income is reduced to 16% in this portfolio so it is definitely tilting toward the aggressive side of investing.  Two ETFs, BND and IEF are eliminated from this portfolio as we will concentrate our income holdings in TIP and TLT. Platinum … [Read More...]

200 Level

Does the Stock/Bond Ratio Make Any Difference?

Do you remember the following quote from this blog post? "The CFP said the $250k should be invested across different asset classes but the stock to bond ratio doesn't really seem to affect the outcome. I was quite skeptical about that last comment." To answer the question or the assertion that the stock to bond ratio does not affect the outcome, I set up a total bond portfolio … [Read More...]

Active vs. Passive Investing: Part 9

Section Nine of the Active vs. Passive article focuses on the chance argument. "Indexers dismiss individuals' long-run record of outperformance with the argument that "It doesn't count because it was only to be expected from the random variable outcomes of cumulative 50/50 yearly probabilities of beating the index (i.e. luck not talent)". The intuitive error in that logic … [Read More...]

400 Level

Condition of Risk Reduction ETFs

ETFs used in the ITA Risk Reduction model experiment include the following "critical" eight:  VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  If the market closes this afternoon close to where it is now, only DBC will reside below its 195-Day Exponential Moving Average (EMA).  VEU and VWO, both international ETFs, are hanging above the cross-over point by pennies.  We … [Read More...]

Preparing a New Portfolio for a Customized Benchmark

Within the TLH Spreadsheet is the capability to develop a customized benchmark for any portfolio that uses any combination of the 17 asset classes found in this blog post. If you are new to ITA Wealth Management, note that we pay a lot of attention to asset allocation, even though it has recently fallen out of favor, particularly since the 2008 market crash.  Why build a customized … [Read More...]