100 Level

Walking Your Way To Independent Portfolio Management

Portfolio management is not equivalent building a house or overhauling a car engine.  It is not that hard, so don't throw up your arms and say you cannot do it yourself.  With Internet access, it is much easier than it was ten to fifteen years ago.  Here are steps to setting up your own portfolio, managing the assets, and monitoring it on a yearly basis. 1) Open up an account … [Read More...]

The Case of Equity Correlations

Readers following the various portfolios may have reservations about eliminating particular asset classes, particularly mid- and small-cap blend as represented by VO and VB.  Why sell off these asset classes?  The reason is the high correlation between the asset classes as you can see from the following screenshot.  The first nine ETFs cover the "Big Nine" U.S. Equity asset classes, and they are … [Read More...]

300 Level

Is It Wise To Pay An Advisor For Access To DFA Funds?

Save the Fees Save the fees and manage your own money using low cost ETFs.  You are going to be dollars ahead and here is the evidence.  Let me describe the process I went though to come to this conclusion - and I am not finished with the analysis.  This data is not going to win me friends among DFA advisors. I logged on to one of the premier web sites on the Internet to find … [Read More...]

“Creme List” for August 5, 2011

Only sixteen stocks made the "Creme List" this week and we cut AMGN, SYY, and T from the list as they failed to show up in the elite group for 13 consecutive weeks.  No new stocks were added to the list this week.  Two companies are priced to "Buy" as indicated the the * adjacent to the position number. … [Read More...]

200 Level

QPP Analysis of Swensen-Faber Merged Portfolio

Merging ideas from the "Swensen Six" and "Faber Ten" portfolios has the potential to generate a wide array of asset allocation plans.  In the following example I am sticking with the general percentages allocated to the broad asset classes, as recommended by David Swensen, but you will see that I am adding asset classes as suggested in the "Faber Ten" portfolio. … [Read More...]

Pay Attention to Your Portfolio: Sample Portfolio Included

Whether you are a beginning or experienced investor, it is important to review and update your portfolio annually if not monthly.  ITA portfolios are reviewed and updated every 33 days.  The updating difficulty is highly dependent on what securities are used to populate the portfolio.  If individual stocks are used the task is more onerous as each stock needs to be reviewed in detail.  Further, … [Read More...]

400 Level

Risk Management: How To Reduce Losses

On page 167 of Mebane T. Faber and Eric W. Richardson's book, "The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets" we read, "Our research has shown that returns are lower and volatility is higher when asset classes are below the 10-month moving average."  What investor is not interested in reducing portfolio volatility while increasing returns.  And possibly more … [Read More...]

“Delta Factor” for Wide Array of ETFs

One reader requested to see what the "Delta Factor" looks like for a wide array of ETFs.  Platinum readers will see the "Delta Factor" for two different periods, three and four years.  If sufficient data were available for these ETFs, I would have displayed a five-year "Delta Factor."  Looking at the two slides below, the time frame selected makes a … [Read More...]