100 Level

Developing a Passive Management Investment Strategy

Passive investing is intellectually appealing to the investor willing to shun Wall Street propaganda and hype from a 200 billion dollar industry.  Just to be clear, we concede there are, and will be, active money managers who outperform their benchmark.  However, as the years go by the winners dwindle in number and it is very difficult to select which managers will be successful thirty … [Read More...]

Five Investment Ideas for 2011

Back in December of 2009 I wrote a blog entry laying out a few investment ideas for readers. Now, nearly 18 months later seems like a good time to check in and see if these ideas are of use and if so, how many were implemented. A few included links takes the reader over to the old blog. Here are the five investment ideas. Read a minimum of two investment books from this list. If … [Read More...]

300 Level

QPP Analysis of Portfolioist Portfolio

In the last blog entry I referenced a recent article in Geoff Considine's blog, Portfolioist.  This "QPP Analysis" post collects those asset classes and rebuilds them into a portfolio that is analyzed below using the software, Quantext Portfolio Planner (QPP).  Platinum members are familiar with the analysis that comes from this software.  If not, select the QPP option found in the right sidebar … [Read More...]

X-Ray of Gauss Portfolio

The following two screen shots are the "X-Ray Analysis" of the Gauss Portfolio by Morningstar.  As you look over these results, how would you improve the make-up of this portfolio?  What ETFs would you add or subtract to improve the quality of this portfolio? I was unable to capture all the information in one screen shot and that is why the information is broken into two … [Read More...]

200 Level

Advantages to Mosaic Investing

It comes as no surprise to long standing Platinum members that most equity ETFs are highly correlated.  The basic ones we use to populate many of our portfolios show correlations of 80% or higher when analyzed using the Quantext Portfolio Planner (QPP) software.  To reduce portfolio volatility and increase the Diversification Metric (DM) we have several choices.  One common approach … [Read More...]

The Permanent Portfolio Approach

The following comment generated this response.  The question is quoted so readers will follow the context of my post.  This is likely to be a long post so prepare yourself for some detailed information. "I would appreciate your comments on the following: I’ve been thinking about the Permanent Portfolio approach, and the Feynman studies; and possibly how to meld them together. First, about the … [Read More...]

400 Level

“New Normal” Portfolio With Risk Reduction Allocation Plan

Following up on the risk adjusted Ten ETF Portfolio analyzed yesterday, what does the "New Normal" group of stocks and ETFs look like when the same risk management algorithm is applied.  In this analysis I was able to stretch the historical period out over five-years.  The percentage allocated to the different stocks and ETFs look reasonable when the low variance BND ETF is not … [Read More...]

Retirement Target Return Revisited

Retirement Target Return Investors always have a goal for their portfolio, whether stated directly or indirectly.  For some it may be as simple as to not lose money.  For others it is to outperform a benchmark.  Exactly what is the Retirement Target Return (RTR) and how does it fit in with portfolio risk management?  RTR is one of the factors found in the Retirement Ratio (RR) … [Read More...]