100 Level

The Asset Allocation Hoax

Prominent asset allocation critic, William Jahnke, titled his 1997 attack on the Brinson et. al. (BHB) papers, “The Asset Allocation Hoax.” Jahnke’s criticisms of the two papers are many. He argues the authors do not focus on the proper problem, they report the wrong number, cost is not considered, and they give the wrong advice. To better understand the problem, here is the … [Read More...]

Twelve ETF Portfolio: Moving From HYG to LQD

Here is the link to a basic 12-ETF portfolio.  In addition to examining the ETFs that make up the portfolio, take time to look at the Correlation Matrix. Over time I plan to sell some shares in HYG and move those funds over to LQD.  View this comparison link to see why I might be inclined to make the change.  If looking for income, HYG does have a higher yield than LQD.   … [Read More...]

300 Level

Equity “Delta Factor” Probability Projections

Approximately once a month I publish either the "Delta Factor" probability projections for equity or bond ETFs.  Considering the recent strength in the markets it seemed like a good time to run the analysis again and see if there are any asset classes or ETFs that have a reasonable probability of performing well over the next six to twelve months.  You may be surprised at the … [Read More...]

Euclid Portfolio Update: 14 March 2013

Since the last review of the Euclid 32 days ago, shares of VO were sold and GTU was added to the portfolio. Platinum members are able to see the current Dashboard and Efficient Frontier in the following screenshots. … [Read More...]

200 Level

Thinking Through a Basic ETF Portfolio

Thinking through the process of constructing the following ETF rich portfolio several required specific goals be met. This material is not for publication elsewhere on the Internet. The portfolio needed to be simple.  While 15 ETFs are not exactly simple, neither is it overly complicated.  To simplify one could reduce the number of bond and treasury ETFs. All ETFs must be commission free … [Read More...]

Retirement Rule #4: Maximize Contributions to Employer Retirement Savings Plan

If you are fortunate and work for an employer who has any sort of matching savings plan, by all means take advantage of this offer and maximize your contribution.  To do otherwise is to leave good money on the table.  For example, assume your employer will match dollar for dollar any contribution you make to a saving plan up to 4% of your salary.  Further, assume you are earning $40,000 per year.  … [Read More...]

400 Level

Post-Modern Portfolio Theory

Serious investors interested in digging deeper into the issue of portfolio risk management will find the article titled, Post-Modern Portfolio Theory of great interest. This link is bound to produce different references over time so here is a clue to finding the article. Google the term, “Post-Modern Portfolio Theory” and then look for the PDF article by the same name. The article is … [Read More...]

Bullish Percent Indicators: 21 December 2012

This past week, despite the political problems in Washington, saw improvement in many of the broad market indexes and individual sectors.  Platinum members can check the results in the following two tables. The following information is not available for publication elsewhere on the Internet. … [Read More...]