100 Level

Harry Markowitz

  Modern Portfolio Theory This morning I came across an interesting article on Harry Markowitz, the father of Modern Portfolio Theory (MPT).  Early in "The Big Bang" article are the fundamental principles of MPT. Quoting from the article, here are the three basic investment techniques or ideas that come out of MPT. "Those techniques are based on three foundational … [Read More...]

Investing 102: Strategic Asset Allocation Planning

Investing 102 - The SAA Plan As a followup to Investing 101, where does one go after reading some verbal guidelines.  Read on.  Laying out a Strategic Asset Allocation (SAA) plan is high on the to-do list.  What is a SAA plan? An example is shown below in the Dashboard worksheet extracted from the TLH spreadsheet.  The arguments for such a plan is explained in some … [Read More...]

300 Level

Preparation for Einstein Portfolio Review

Next week the Einstein is up for review and here is the pre-update picture for this portfolio.  We first start with the Efficient Frontier graph, them move on the the Rankings table, and finally the Buy-Hold-Sell recommendations. This information is not available for publication elsewhere on the Internet. … [Read More...]

Ivy-3: Twenty ETF Portfolio

  Twenty ETF Portfolio Before readers become too excited over the Return/Risk ratio of the following portfolio, please note that EWX, BWX, and IGF have short records.  This means we do not have three years of data for these ETFs, and when this happens the projected risk or standard deviation percentage value is lower than it would be were we to have complete records. With that … [Read More...]

200 Level

Why The Preference For Index Vehicles?

Why build portfolios using index investment vehicles such as index mutual funds or non-managed index ETFs instead of selecting individual stocks? An excellent question since the majority of individuals construct their portfolios using stock selection. Stock selectors are active investors as they hold the belief that through brains, stock analysis, technical analysis, or some other art form, they … [Read More...]

Portfolio for 25-Year Old: The Positives and Negatives

As a followup to William Bernstein's e-book, "The Ages of the Investor," what might a portfolio look like for a 25-year old investor?  The following portfolio is built around 15 ETFs that cover the U.S. Equities market, developed international markets, commodities, emerging markets, both domestic and international REITs, sovereign debt, bonds, and treasuries.  In other words, we are diversifying … [Read More...]

400 Level

Delta Factor: Second Draft

Below is the second draft of additional Delta Factor calculations.  As one can see from this table, the trends or signals arrive early.  I'm still not satisfied with the algorithm used to generate the Buy, Hold, and Sell signals for these ETFs. Note the dramatic shift between 9/15/2008 and 10/15/2008.  When I see something like this I recheck my figures. … [Read More...]

Delta Factor Projections for International Countries

Based in a request from a Platinum member, here are the Delta Factor (DF) projections for the international countries I track on a regular basis.  As might be expected, since DF relies on reversion-to-the-mean principles, countries that are in trouble show up as the best opportunities over the next several years.  Investors need to perform their own research as the Delta Factor is just one … [Read More...]