100 Level

The Power of Consistent Savings

Two of the recent portfolios added to the stable of accounts tracked at ITA Wealth Management are the Kenilworth and Gauss.  Platinum members have access to all the transactions of these two portfolios.  I'll use the Kenilworth as the primary example of the power of consistent savings as the account was initially seeded with one $1,500 investment followed by another $1,000 addition.  After that, … [Read More...]

Which Family of ETFs Should I Use?

Question sixteen (16) in this blog entry asked the following question.  "If one prefers Vanguard ETFs, but one's investment service company does not offer commission-free Vanguard ETFs, then is the best option to choose equivalent commission free ETFs that are offered (iShares)?"  Yes, is my answer, and others can chime in with your ideas. Vanguard, Barclay Global … [Read More...]

300 Level

Portfolio Performance: 5 November 2010

Portfolio Performance The market this past week reminded me a bit of market action in the late 1990s in that it was very difficult to outperform the S&P 500. In our case, we use the total market index, VTSMX, as a primary benchmark and it was a challenge for any of the ten portfolios tracked using the TLH spreadsheet to do better than that benchmark. The Retirement Ratio (RR) remained the … [Read More...]

Momentum-Optimization Analysis of Aggressive Portfolio

This blog post is a follow-up analysis of the QPP analysis published less than two hours ago.  What I've done is to take the same set of ETFs, but this time I optimized the portfolio to come up with a different strategic asset allocation plan. Efficient Frontier:  The current portfolio (diamond dot) lands smack on top of the optimized portfolio or so close one can barely (blue dot) distinguish … [Read More...]

200 Level

Value Oriented Portfolio

Last evening a value oriented portfolio was mailed to me so I thought I would run it through a Quantext Portfolio Planner analysis.  Unfortunately, three of the thirteen ETFs have "short records."  This simply means the data does not extend back a minimum of three years. The ETFs with limited data are: MGV, VXUS, and VSS.  Nevertheless, here are the results. To view this … [Read More...]

Constructing a Simple Seven ETF Portfolio

Looking for a conservative portfolio with reasonable QPP values?  Check out the following asset allocation plan that includes 40% allocated to bonds and income with an added bent toward value as advocated by Fama & French.  This portfolio covers the global market, both in equities and REITs.  The EFV ETF skews the portfolio toward the value side. … [Read More...]

400 Level

Risk Defined

Portfolio Risk Risk is a messy word as it carries so many different meanings in the investing world.  In the most general sense, it means we don't know what is going to happen.  Here are several specific meanings of the term.  We will begin by defining "systematic" and "specific" risk. 1.  "Systematic" risk is risk we cannot avoid if we seek returns higher than the interest rates from a money … [Read More...]

VTI And The ITA Risk Reduction Model

At the request of a long-time Platinum member, I am going to examine a number of key ETFs used to populate specific asset classes in an effort to see how well the ITA Risk Reduction model worked over the last four months.  Keep in mind that no one ever stated that the ITARR model, or a variation such as the Faber-Richardson model, will work all the time, month after month.  Where the … [Read More...]