100 Level

Go With Index Funds

Flee Actively Managed Mutual Funds Let me quote extensively from Ferri's "Power of Passive Investing" book. "In every asset class, the odds of beating index funds are low, and the payout for being right is well below what a fair payout should be.  The only conclusion one can draw from this data is that active management cannot compete against passive management in any … [Read More...]

“Delta Factor” for Maxwell & Euclid Portfolios

Initially, the plan is to hold only five equity ETFs in the Maxwell and Euclid portfolios.  Those five are: VTI, VEU, VWO, VNQ, and RWX.  Yes, there will be bond and income ETFs, but the equity investments will be confined to five ETFs - at least at the beginning of this experiment.  At the close of the market on October 4, 2011, what is the "Delta Factor" data telling … [Read More...]

300 Level

Preparing For Kepler Review

In a few days the Kepler Portfolio comes up for review, so here is the preparation material.  I'll walk readers through the Efficient Frontier, Ranking, and Buy-Hold-Sell (BHS) recommendations. Efficient Frontier:  The Kepler requires some adjustments before the current allocation is fully optimized.  What to do is shown in a later screenshot.  Holdings such as TIP are not improving the … [Read More...]

Passive vs. Active Investing

Why do large endowment funds use a passive investment strategy? Is it due to fund size and their portfolios are so large they mirror the market? Again, quoting from my “Active vs. Passive” paper, we have the following. “An estimated 40% to 50% of all institutional monies are in index or passive portfolios while only 3% to 4% of retail investors make use of passive strategies. … [Read More...]

200 Level

Rule #7: Don’t Dip Into Your Retirement Savings Until Necessary

Eventually you will be spending your retirement, but don't withdraw funds before retiring.  This is a mistake all too many workers make without realizing the damage it does to their retirement fund.  When corporations moved from pension plans over to 401(k) plans, they shifted the savings burden from their companies over to their workers.  According to Hedrick Smith, Who Stole the American Dream, … [Read More...]

Performance of Portfolios: 23 December 2011

Portfolio Performance Data Once more, the ten portfolios had a good week in an absolute sense, but most gave up some gains when measured against the VTSMX benchmark.  The numbers are telling me that the U.S. Equities market is stronger than the international markets.  Global exposure is a drag on these portfolios as we hold EFA, EPP, VEU, VWO, and RWX.  When updating the values, … [Read More...]

400 Level

Preparing the Maxwell for TAA Action

Platinum members interested in the quantitative approach to improving returns and reducing portfolio uncertainty for the Maxwell take note.  This morning shares of VTV and VOE were sold making room for VTI, VEU, VWO, VNQ, and RWX.  Check out the asset allocation plan below for this portfolio. … [Read More...]

Reducting Risk With The Euclid Portfolio

The 12th of the month is the day to closely examine each ETF used to populate the Euclid Portfolio, one of ITA Risk Reduction model portfolios.  While the markets have several hours before they close, it is highly unlikely any of the ETFs will change positions with their respective 195-Day Exponential Moving Averages (EMAs).  Here is the process I went through in my examination of the … [Read More...]