100 Level

Smartest Low Risk Portfolio

This is the first of four portfolios that run from low risk to high risk or aggressive growth.  One Quantext Portfolio Planner (QPP) analysis is already available on the Internet at Seeking Alpha for a medium risk portfolio.  That is the fifth portfolio in this series of analysis.  In the following example, I make a few changes in the ETFs as I prefer using the low-cost Vanguard … [Read More...]

Analyzing Return and Risk for U.S. Equity ETFs

We frequently read investment summaries as follows.  I pulled the following information from Harold Evensky's book, Wealth Management. Size is significant.  Small stocks have higher standard deviations than large stocks. Book value is significant.  Stocks with low Price/Book ratios have higher returns than stocks with high Price/Book ratios. Adjusted for book value … [Read More...]

300 Level

Gauss Portfolio Review: 12 November 2012

Readers interested in a detailed analysis of the Gauss Portfolio will find it at this link.  The following is an update and a discussion of how I am using the ITA Risk Reduction model with Gauss.  The first thing I did this morning was to check the price of each ETF.  So as to maintain the percentage performance of the ITA Index benchmark, I hold a few shares of each asset class.  When I ran the … [Read More...]

Asset Allocation: A Look Back

Mosaic Portfolio Lookback - 10/1/2007 Asset allocation is at the core of our portfolio plans.  In the following screen shot, Platinum members see a generic portfolio that is Mosaic in nature.  By Mosaic I mean the portfolio contains both ETFs and individual stocks.  While this is not an ideal portfolio, it illustrates the points I am making over the next several blogs entries. The … [Read More...]

200 Level

Portfolio Performance Data: 4 March 2011

Photograph: Harley at the cabin in Central Oregon Platinum members will find the performance data below.  This is the first complete update since the February statements became available.  In almost every situation, the portfolios gained ground on the VTSMX index.  Quite a few showed improvement in the Sortino and Retirement Ratios, possibly the key measurement. Platinum … [Read More...]

Starting From Scratch: The Logic Behind the “Swensen Six” Portfolio

When it comes to building a portfolio, David Swensen's general guidelines provide numerous strong starting points.  His portfolio satisfies requirements of numerical diversification, equity orientation, and functional diversification.  While Swensen does not recommend specific tickers in his book, Unconventional Success, he lays out basic guidelines I consider vital to portfolio … [Read More...]

400 Level

What Is A Good Sortino Ratio?

Before answering the above question, one needs to know what the Sortino Ratio is measuring.  Here is the Wikipedia definition.  To keep this idea as simple as possible, write down the equation, S = (R - T)/DR.  S = Sortino Ratio. The R is the Internal Rate of Return (IRR) for the portfolio.  If you are using the TLH Spreadsheet*, the IRR is calculated for you by the Excel™ SS. T is the … [Read More...]

Madison Portfolio Review Time

One of the five portfolios using the ITA Risk Reduction model is the Madison.  In preparation for the review we first look at the Dashboard to see if the asset classes are populated properly.  While there are a few out-of-balance classes, the percentages are nothing to worry about.  Most of the asset class are within the 25% Threshold range.  Not only are all eight critical … [Read More...]