100 Level

Critical Questions

When it comes to investing, critical questions need to be asked over and over. Right now I am seeking an answer to whether one should be involved in active or passive management. Should one seek active management or is it better to become a passive investor? Long-time readers of ITA Wealth Management know that I come down on the side of passive investing as that is what the data is telling me. … [Read More...]

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...]

300 Level

Nine Stocks That Pass The Valuation Stock Screen

Within the American Association of Individual Investors (AAII) "Stock Investor Pro" software program are several valuation measurements.  These valuations include the following. Earnings per share Dividend Cashflow Free Cashflow Sales In the screen shown below, I am looking for companies that are currently priced below each of the five valuation screens.  I … [Read More...]

Kepler Portfolio Update

Once more it is time to update the Kepler Portfolio.  In an effort to bring the commodities asset class into balance, 30 shares of DBC were purchased last week.  This leaves two asset classes (excluding cash) outside our 25% threshold limit.  One limit order is in place for the Mid-Cap Blend asset class.  At this time there is insufficient cash to bring both asset classes into … [Read More...]

200 Level

Portfolio Performance – 1 October 2010

TDAmeritrade came out with the September statements this afternoon so I was able to update many of the portfolios in greater detail that expected. In nearly every case, we made progress either by gaining on the benchmarks or reducing portfolio risk. Only in the case of the Schrodinger Portfolio, where we switched to the ITA Index benchmark for our SR and RR calculations, did we see significant … [Read More...]

Asset Allocation and Benchmarking Portfolio

A few days ago I read the following comment.  I did not question the reasoning behind this statement.  "Calculating return is relatively pointless if you are investing in indices." While the point of not calculating the portfolio return may make sense for the investor who selects one or two broad index funds for their complete portfolio, it lacks sound reasoning for … [Read More...]

400 Level

A Twist to the ITA Risk Reduction Model

Photograph: Mountains near Emerald Bay at Lake Tahoe.  Taken from the California side of the lake. While we want to keep the ITA Risk Reduction model as simple as possible, there is another wrinkle available for sophisticated investors.  Platinum readers will be interested in the explanation that follows. Platinum membership is available for $5.00 per month.  Learn how to reduce … [Read More...]

Examining “Delta Factor” for ETF Equities

Which ETFs show the highest probability of doing well over the next six to twelve months when compared to the VTSMX index fund?  The "Delta Factor" graph shown below provides a few clues. … [Read More...]