100 Level

Passive Management: The Six Step Process

The following six steps provide investors with an outline for organizing and monitoring a portfolio.  Specific details of implementing these guidelines can be found by tracking one of the ITA Portfolios. 1.  Determine the portfolio objectives.  Consider the following as possible reasons for constructing the portfolio. Is this a retirement portfolio? Is it a higher education … [Read More...]

Is There An Investment Style That Is Truly Passive?

We read a lot about active vs. passive investing, and mixed into that discussion is index investing.  About four months ago I wrote a series of articles on this very subject where I was rebutting an Internet article.  On this blog I track eleven portfolios that run the gamut from passive to mosaic to active.  To understand each, it helps to go back to Harold Evensky's … [Read More...]

300 Level

What Should I Do If I Am Holding Cash?

What should I do if I am holding cash?  Is it time to move back into the market, and if so, how should I proceed?  Those are difficult questions considering the S&P 500 (VFINX) increased in value by 87.4% since January 20, 2009.  If one were to follow the Louis Rukeyser analysis, moving immediately into the market is the correct decision.  However, Rukeyser was using data … [Read More...]

Schrodinger Portfolio Update: 26 April 2012

Looking for a passive portfolio?  Look no further than the Schrodinger.  In operation since late 2000, this portfolio had only two rebalancing purchases over the past year.  Otherwise, no transactions other than cash dividend payouts.  ETFs purchased when the fund was launched are still part of the portfolio.  How is that for stability. In the following screen shot, I am … [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...]

Alternative Investment Vehicles to Suggested Index Funds

What are the alternatives one might use to those suggested by Solin in his recent book, "The Smartest Portfolio You'll Ever Own."  The reason for seeking alternative investments is two fold.  1)  We seek ETFs that have historical records of at least three years.  This is so we can run Quantext Portfolio Analysis (QPP) on the portfolios.  2)  When … [Read More...]

400 Level

Condition of Risk Reduction ETFs

ETFs used in the ITA Risk Reduction model experiment include the following "critical" eight:  VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  If the market closes this afternoon close to where it is now, only DBC will reside below its 195-Day Exponential Moving Average (EMA).  VEU and VWO, both international ETFs, are hanging above the cross-over point by pennies.  We … [Read More...]

Equity ETF “Delta Factor” Projections: Three & Five Years

What are the projections for Equity ETFs using three and five years of historical data?  The projections based on five-years of historical data spans the "Great Recession of 2008" while the three-years of historical data includes one of the better bull markets of recent memory.  With this historical context, we can almost visualize the projections for the following "Delta Factor" data tables.  … [Read More...]