100 Level

Current Valuation of U.S. Market

This past weekend I was in conversation with an investment manager and he argued that stocks are currently undervalued.  In fact, they are at their lowest value since the 1950s.  Frankly, I was shocked to hear this analysis.  That conclusion did not correlate with my sense of the market so I began to search the Internet for market valuation figures and I came upon a most interesting … [Read More...]

Optimizer Warnings From William Bernstein and Harold Evensky

A few years ago I worked with a Mean-Variance Optimization (MVO) program designed by David Wilkinson for William Bernstein.  There was a mind numbing amount of manual data entry and there was the perpetual problem of data accuracy.  Was I using the right data and was it current?  The software required entering constraints, otherwise the MVO software would pump out portfolios that made little … [Read More...]

300 Level

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...]

Newton Portfolio Review: 25 August 2011

Over the last month, numerous limit orders were struck when the market dipped into buy zones.  Shares of RWX, VBK, VOT, and ELD were added in an effort to bring many under target asset classes back into balance.  We are still holding considerable cash in this portfolio and there are many limit orders still in place.  The expectation was that the market would drop even further.  … [Read More...]

200 Level

Lottery Foolishness

Who plays the lottery?  A recent news release revealed that lottery players earning $13,000 or fewer dollars per year, were spending 9% of their wages on lottery tickets. Yes - nine (9%) percent. Then I ran into this report when I was searching for more information on who plays the lotteries. Readers of this blog know that one does not fund a retirement plan by playing the lottery. What we … [Read More...]

Simplified “Holy Grail” Portfolio: A 12-ETF Approach

12-ETF Portfolio Following up on yesterday's blog post, here is a simplified revision of the "Holy Grail" portfolio.  Any time one can reduce the number of holdings and improve the return and volatility projections, give the new portfolio high marks.  The following group of twelve (12) ETFs provides a higher Return/Risk ratio than the portfolio discussed yesterday.  … [Read More...]

400 Level

Retirement Planning: Stress Testing a Simple 5 ETF Portfolio

As mentioned in a recent post, stress testing the portfolio is one useful method of checking to see if there will be sufficient funds available to comfortably retire.  In this QPP analysis of a simple five ETF portfolio we will make some initial assumptions that will vary from investor to investor. Assume this investor is 50 and plans to retire at age 67.  The current portfolio is … [Read More...]

Bullish Percent Indicators Show Markets Continue to Weaken

Bullish Percent Indicators (BPI) provide us with a broad look at large index and sector movements for the U.S. Equities market.  While I do not use either the index or sector tables as trading tools, I do watch them for general market trends and as guides to determing when the market is over bought or over sold.  Right now the market is over bought and weakening. Index BPI:  One significant … [Read More...]