100 Level

Return and Risk Relationship

What is the relationship between return of a portfolio and the associated risk involved? Quoting from an “Active vs. Passive” paper I found in my files. “High potential returns always involve high potential risks. There are no low-risk/high-return investments. Investment risk comes in many forms but, to most investors, risk means the potential for losing investment capital and … [Read More...]

Investment Resolutions

With the start of a new year, it is a good idea to establish some goals or resolutions.  We want to be able to keep these resolutions and many on the list below are not new to readers of ITA Wealth Management.  So let us begin. 1.  Lay out an investment plan. 2.  Pay off credit card debt. 3.  Establish a savings plan.  Follow the Golden Rule of Investing. 4.  … [Read More...]

300 Level

Preparing for the Gauss Portfolio Review

Prepping for the Gauss shows some changes are recommended.  That becomes apparent when one examines the Efficient Frontier graph shown below.  We need to increase ETFs that have a greater probability of bringing returns to the Gauss.  The second and third screenshots will help identify those ETFs. The following material is not available for publication elsewhere on the Internet. … [Read More...]

ITA Ratio Introduced

As I wrote in an earlier comment, I am moving from the Sortino ratio over to what I call the ITA ratio.  Let me go into detail as to why I am making the change.  I will explain how the new ITA ratio is calculated and how it will be programmed into later versions of the TLH spreadsheets.  It is not going to be all that difficult to make the change so stick with me. Before I launch … [Read More...]

200 Level

Portfolio Performance: 15 July 2011

Photograph: Mercedes All portfolios tracked using the TLH Spreadsheet lost ground this week.  Those are the absolute results.  On a relative basis, the vast majority gained ground on either or both the ITA Index and VTSMX benchmarks.  Most portfolios also picked up strength with both the Sortino and Retirement ratios.  Inflation dipped 0.01%, a modest positive signal. Asset … [Read More...]

Asset Allocation Performance Data

Portfolio Performance Below is the performance data table for the portfolios tracked here at ITA Wealth Management. If the percentages seem exaggerated, note the launch time as young portfolios will show unusual results. Over time the higher percentages will begin to migrate toward values of the VTSMX benchmark. Readers should pay attention to the Sortino Ratio (SR) and Retirement Ratio (RR) as … [Read More...]

400 Level

“Delta Factor” Projections Merit Caution

This morning I ran into the following article, "Billionaires Dumping Stocks."  Heavy hitters, including Buffett, are shedding U.S. Equity stocks.  After reading this article I thought it prudent to run a "Delta Factor" analysis on a basic portfolio of 20 ETFs.  Platinum readers will find the QPP analysis below and the "Delta Factor" projections for 13 equity and seven bond ETFs. … [Read More...]

Retirement Portfolio: Part Three

Part three of this series of retirement preparations shows how one might optimize the array of ETFs presented in the earlier two blog posts.  In the following screen shot I set up a number of constraints and one was to hold the Diversification Metric to the 40% standard.  I also included BND, Vanguard's Total Bond ETF in the mix of investments.  Even by forcing none of the bonds to hold more than … [Read More...]