100 Level

Sydney Morning Herald Article on Hedge Funds

There are several reasons for not using hedge funds. Unless one can hire a manager who is consistently in the top quartile forget it. Fees are much too high. Generally 20% of profits plus 2% of assets. The funds lack transparency.  Who knows what the manager is doing. Do I need to mention Jon Corzine? Most of us do not have sufficient wealth to even consider a … [Read More...]

Setting Up a New Portfolio

Whether one is a beginning or experienced investor, a respectable portfolio can be constructed using the following 27 ETFs.  These ETFs are available commission free to TDAmeritrade clients.  While there are 27 ETFs available, it is not expected all would be part of the portfolio at any one time.  Currently, only 13 ETFs are recommended with the current conditions. This material is not … [Read More...]

300 Level

QPP Analysis of Suggested ETFs

In the following analysis I show the make up of the suggested tickers.  VSS and MLPI did not have three-year records so I cut them from the list.  In the first slide I show the makeup of the portfolio using nearly equal percentages for each ETF.  In the second slide I show the "Delta Factor" projections using a four-year time span.  The third slide shows the … [Read More...]

“Delta Factor” Changes Over Last Week

How are the "Delta Factor" projections altered after a positive week in the market?  To answer this question, I listed many of the ETFs used in various portfolios and ran the analysis for two different time frames.  The first screen shot shows the Delta and Delta Factor from 10/3/2007 through 10/3/2011.  The second screen shot captures the data from 10/10/2007 through … [Read More...]

200 Level

Capital Markets Outlook and Retirement Payout Percentage

Platinum members are well aware of my conservative recommendations when it comes to the payout percentage during retirement.  While it is common to suggest a payout of 5% during retirement, I advocate pulling out as little as 2% per year and no more than 4%.  Lowering the payout rate "insures" one will not run out of money in retirement.  I hope to have a spreadsheet that … [Read More...]

Asset Allocation: How Important Today?

Asset Allocation Due to a recent Ibbotson study (Unfortunately, this article now requires one to register.) asset allocation is not the investment elixir today it was thought to be in the late 1980s and 1990s. Nevertheless, it remains the best method for constructing portfolios if the goal is to outperform a broad market benchmark index such as the VTSMX or ITA Index* while reducing portfolio … [Read More...]

400 Level

Retirement Ratio

While on vacation I spent time thinking what I would call the risk ratio I am now using to see if the portfolio meets the Return/Risk requirement. This ratio was called the ITA Ratio but that did not convey any useful information.  I considered the title to be a temporary place holder until I came up with something more expressive. The ITA Ratio will now be known as the Retirement Ratio as it … [Read More...]

Point & Figure Scaling: Why Use Percentage Instead of Traditional Option

A situation arose this morning regarding whether X's or O's are showing up in the right-hand column of the Vanguard's emerging market ETF, VWO.  If the scaling is set to 'percentage' O's are found in the right most column.  However, if the scaling option is set to 'traditional,' X's show up in the right-hand column.  Which is preferred?  To … [Read More...]