100 Level

Precious Metals and European Crisis

Precious Metals React Badly to European Crisis In times of economic uncertainty, a wise investor would hedge their market bets with silver and gold in hopes of a future payday. They would either buy precious metals in bullion and coins or invest in stocks related to precious metals, like mining stocks. Historically, precious metals are considered "safe havens" when the stock market may … [Read More...]

Asset Classes: How Many Should You Own?

With much recent attention given to answering the money managers most perplexing question, what percent of the portfolio should be invested in each asset class, the whole idea of how many asset classes to include in a portfolio has been neglected.  William Bernstein answers the question this way.  "You might as well ask the meaning of life.  About all one can say is, more than three."  The major … [Read More...]

300 Level

Bohr Portfolio Modifications

I made a few changes in the Strategic Asset Allocation plan for the Bohr Portfolio.  I am planning to sell off the holdings in mid-cap blend and small-cap blend, something I indicated I might do with the Einstein.  Those dollars will be moved to small-cap value in keeping with the Fama-French research. … [Read More...]

Portfolio Diversification

This morning a link to the following Seeking Alpha article showed up in my e-mail box.  ITA Wealth Management readers know the importance of diversification and our mature portfolios include the five asset classes mentioned, and many portfolios include all six.  While the article advocates diversification, readers need to be aware that the graph is showing data that was … [Read More...]

200 Level

Risk-Parity: Is This Portfolio For You?

A Close Look At A Risk-Parity Portfolio* The idea of risk-parity has been around for a number of years, if not by name, certainly by concept.  Risk-Parity is an alternative method of constructing portfolios.  Instead of building a portfolio around allocation of capital the portfolio is emphasis is placed on allocation of risk.  All eleven portfolios tracked here at ITA Wealth … [Read More...]

Portfolio #5: Ages 66 – 100

Retirement Portfolio Constructing a portfolio for the retirement years requires one to focus on portfolio risk or uncertainty while not neglecting return. If the portfolio asset allocation plan is too conservative, the return will not meet lifestyle expectations. Inflation is again on the rise and this needs to be taken into consideration when putting together a retirement oriented portfolio. … [Read More...]

400 Level

Repositioning Madison Portfolio

ITA Wealth Management readers checking the latest Portfolio Performance* data table will observe that the Madison Portfolio is lagging the VTSMX benchmark.  In an effort to push this portfolio performance to a higher level, I am going to employ the ITA Risk Reduction (ITARR) model, or the same one being used for the Maxwell and Euclid portfolios.  This will require selling some current … [Read More...]

“New Normal” Portfolio Analyzed

Long-time readers of ITA Wealth Management are familiar with the "New Normal" portfolio, a risk oriented portfolio developed by a Platinum member.  Following is an analysis of an approximation of the NN portfolio.  Approximate in the sense that several tickers were combined into one as the "Ranking Software" will not handle more than twenty investments in one run.  In addition I substituted XOM … [Read More...]