100 Level

The Asset Allocation Hoax

Prominent asset allocation critic, William Jahnke, titled his 1997 attack on the Brinson et. al. (BHB) papers, “The Asset Allocation Hoax.” Jahnke’s criticisms of the two papers are many. He argues the authors do not focus on the proper problem, they report the wrong number, cost is not considered, and they give the wrong advice. To better understand the problem, here is the … [Read More...]

ITA Wealth Management Attracts Attention

Several months ago, while I was relaxing in the basement, a telephone call from a well-known investment house (you would recognize the name immediately) showed up on my caller identification screen.  Assuming it was a "chum for client" call, I did not pick up.  However, my wife answered the phone and told me "ABC Investments" wanted to speak with me. I was … [Read More...]

300 Level

Sample Portfolio Requested By Platinum Member

The following set of tickers and percentages were sent to me for analysis.  I used five years of historical data and set, as I generally do, a 7.0% return projection for the S&P 500.  I used TIP (1.0%) for the cash holding.  That choice has little impact on the final projections.    Below is the analysis data.  Instead of me writing up my observations, I'll … [Read More...]

Einstein Portfolio Review: 2 May 2012

Due to the blog shutdown, I'm a few days late with this update.  That delay only means that all the April data (April dividends) is included in this review.  Below is the current Dashboard as extracted from the TLH Spreadsheet.  … [Read More...]

200 Level

Risk-Parity Portfolio: What Is It And What Does A Risk Portfolio Look Like?

Reducing Risk Through Risk-Parity Risk-Parity: Have you heard of the term or seen reference to this style of portfolio construction?  Join the crowd if this is new to you, even though the Risk-Parity idea has been around for quite a few years.  Risk-Parity is an alternative approach to portfolio construction where assets are allocated based on risk rather than allocation according to … [Read More...]

Keeping Portfolios Simple

Three Sample Portfolios Complicated portfolios discourage investors and that is why I am attempting to simplify the portfolios tracked here at ITA Wealth Management.  There are many examples of possible portfolios in the literature, particularly in books by Faber-Richardson, Swensen, and Bernstein.  Let's start with one of the simple portfolios laid out by David Swensen. While Swensen does not … [Read More...]

400 Level

Sector Bullish Percent Indicators: Several Switch Sides

Sector Bullish Percent Indicators are relatively new to ITA Wealth management.  While I am not a believer in building a portfolio through sectors, I do follow them as there may be opportunities to add a particular sector to a portfolio built around asset classes.  For this reason, I track the Bullish Percent Indicators (BPI) as shown in the data table below.  The reason I favor … [Read More...]

Bullish Percent Indicators: 24 August 2012

Little changed this week in either the market or sector Bullish Percent Indicators.  Check for differences in the two tables shown below by looking at the last two numbers in each column. … [Read More...]