100 Level

Nine Essential Investing Suggestions

Suggestions for the Astute Investor Repetition is the mother of all learning. Whether you are a new ITA Wealth Management reader or a long-term follower, there are investing basic that just don't change, and here are a few. 1.  Follow "The Golden Rule of Investing" which is to save as much as you can as early as you can. Check out the Goofus vs. Gallant material. 2.  … [Read More...]

Constructing Your First Portfolio

Faced with the task of building a portfolio from scratch, what are the first steps?  Assume one saved a bit of money, read a few of the Top Ten Investment Books, and is convinced of the wisdom of index investing. Read the following questions and answer them as best you can.  Don't be fearful of making a mistake or feel these decisions cannot be reversed.  Not only can you change them, I … [Read More...]

300 Level

Low Risk Retirement Portfolio

Yesterday, I wrote an article for Seeking Alpha and one reader suggested a simple portfolio where equal percentages be allocated to VTI, GLD, SHY, and TLT.  Exactly what does such a portfolio look like when a Quantext Portfolio Planner (QPP) analysis is applied?  What does the correlation matrix look like and would such a portfolio work as one prepares for retirement?  The following … [Read More...]

Einstein Portfolio Review: August 13, 2011

Although the Einstein Portfolio is not scheduled for a review, shares of VEU were added to the portfolio this week.  This purchase brings the developed international markets asset class closer to the target range of 15.0%.  In the first screen shot we see the Strategic Asset Allocation plan presented in tabular form.  I've not made the decision to eliminate mid- and small-cap … [Read More...]

200 Level

Madison Portfolio Update: 18 April 2012

Examination of the eight critical asset classes held in the Madison show only commodities, as represented by DBC, is priced under its 195-Day EMA.  Both VEU and VWO are close to crossing below their respective EMAs so I will need to check those again a few hours after the market closes as it takes time for the index prices to settle out.  For now, I sold off the shares of DBC as there is … [Read More...]

Fundamental Principles for Constructing a Portfolio

The "science" of portfolio construction requires numerous fundamental principles.  Long-term portfolios call for an orientation toward return or growth through proper diversification.  Growth needs to be tempered so as to handle times of recession, deflation, and inflation.  As described in the Harry Browne "Permanent Portfolio" one needs to prepare for the four stages of the market; prosperity, … [Read More...]

400 Level

Exponential Moving Average Review

The term Exponential Moving Average (EMA) showed up in a number of recent posts.  Those unfamiliar with this term would benefit with a review.  In searching the blog, I thought I defined EMA, but that post was likely lost when I move the blog to a new host provider.  Here is how EMA is calculated. One first calculates a Smoothing Constant based on the number of days one will be using for the … [Read More...]

Current Condition of the ITA Risk Reduction Model

In contrast to a passive or index approach to investing, what is the state of the critical ETFs used in the portfolios where we are employing the ITA Risk Reduction (ITARR) model?  Tactical Asset Allocation is applied to ETFs in the Maxwell, Euclid, Madison, Kenilworth, and Gauss portfolios so as to avoid "Black Swan" events as we experienced in 2002 and again in 2008.  While … [Read More...]