100 Level

If Constrained To Buy One ETF What Would It Be?

Approximately a week ago I was talking with a young woman who is earning a bit above minimum wage so she does not have much to save.  In addition, she is helping her family rebuild their home, damaged by flood.  Her knowledge of investing is close to nil, yet she wants to begin investing.  Regular readers of this blog know that a wide range of topics are covered beginning at Level 100 and moving … [Read More...]

Beat The Market

How many times have you heard the phrase, "Beat The Market?" Over a year ago, Mark Hulbert wrote an article on this subject. Here is an important quote from the Hulbert article. If you don't know who Mark Hulbert is, Google his name and learn about his contributions to the field of investing. "Even that, however, underestimates the difficulties of beating an index fund. … [Read More...]

300 Level

Sample Portfolio Optimized

The following screenshots show the optimization analysis of the submitted sample portfolio.  First I show the Efficient Frontier graph, followed by the ranking order of the holdings, and finally the Buy-Hold-Sell data sheet. Efficient Frontier:  Since I did not have the exact number of shares for each holding, I estimated the approximate percentage.  The current portfolio lies very close to the … [Read More...]

Annaly Capital Management (NLY): Little to Offer Except High Dividend

What does Annaly Capital Management (NLY) have to offer other than a high yield of 12%?  Sales, profits, and earnings are erratic making it difficult to perform any sort of useful analysis.  Check the screenshots below. Not for publication elsewhere on the Internet. Page 1:  Looking at the graphs one would think they are at Six Flags amusement park.  While it is difficult to make any sort of … [Read More...]

200 Level

Portfolio Construction Using David Swensen Percentage Guidelines

David Swensen writes in his "Unconventional Success" book, "Construction of a financial-asset portfolio involves full measures of science and art.  The science encompasses the application of basic investment principles to the problem of combining core asset classes in an efficient, cost-effective manner.  The art concerns the use of common-sense judgment in the challenge … [Read More...]

Asset Allocation Performance Data

Portfolio Performance Below is the performance data table for the portfolios tracked here at ITA Wealth Management. If the percentages seem exaggerated, note the launch time as young portfolios will show unusual results. Over time the higher percentages will begin to migrate toward values of the VTSMX benchmark. Readers should pay attention to the Sortino Ratio (SR) and Retirement Ratio (RR) as … [Read More...]

400 Level

Harry Markowitz

  Modern Portfolio Theory This morning I came across an interesting article on Harry Markowitz, the father of Modern Portfolio Theory (MPT).  Early in "The Big Bang" article are the fundamental principles of MPT. Quoting from the article, here are the three basic investment techniques or ideas that come out of MPT. "Those techniques are based on three foundational … [Read More...]

Position of Kenilworth Portfolio

This past Tuesday was "examination day" for the Kenilworth Portfolio. Several key asset class ETFs were priced above their 195-Day EMA so shares were purchased based on the Buy and Sell rules laid out in the ITA Risk Reduction model.  Two asset classes that did not make the "Buy" list were International REITs and Commodities.  Checking this morning, both RWX and DBC … [Read More...]