100 Level

Risk-Parity: A Brief Explanation of How Risky a 60/40 Portfolio Really Is

While I have a sample Risk-Parity portfolio coming out early tomorrow morning, I want to rush out a brief description of how risk is calculated.  This not for the mathematically squeamish, but the concept is not difficult if one can get past one step in the logic.  Don't be surprised if this concept does not alter how portfolios are put together here at ITA Wealth Management.  … [Read More...]

The Condition of Bonds Using Delta Factor

What is the current condition of bond ETFs and should they be part of the portfolio?  To examine this question one method of analysis is to apply the Delta Factor.  When I run a reversion-to-the-mean analysis on bonds, I use AGG as the reference or standard.  For equity ETFs I use the VTSMX total stock index fund.  In the following table each bond ETF is compared with the … [Read More...]

300 Level

Sortino Ratio Update

Investors using the TLH spreadsheet and in particular, the SR worksheet, will find this video/audio clip a refresher in updating the Sortino and Retirement ratios. One of the first changes to make in the calculation is to update the inflation rate. The latest data shows inflation moving from 1.1% to 1.2%. Readers can find this information on a site titled, U.S. Inflation Calculator. In the … [Read More...]

Portfolio Review of the Kepler: 23 September 2011

The Kepler Portfolio was launched near the end of the last major bear market and is therefore a relatively new portfolio.  Even so, it is fully funded with small contributions added each month.  Platinum members have access to the spreadsheet upon request.  As usual, we begin with a look at the Dashboard, the worksheet that is found inside the TLH Spreadsheet. … [Read More...]

200 Level

The Active vs. Passive Management Debate

Will there ever be a definitive answer to the active vs. passive management debate?  Likely not and here are possible reasons why we will never have a complete answer to which method is superior.  At the very core of the argument is lack of data, at least as it pertains to one level of the argument.  The active vs. passive argument is carried on at two levels.  One level is … [Read More...]

Stress Testing the Modest Retirement Portfolio

Back on January 7 of this year I posted a "Modest Portfolio" that readers can locate and see the entire analysis.  Below is the same portfolio with a stress test included.  Since this is a middle of the road type portfolio, it is an excellent example to use for a stress test. The portfolio holds only nine ETFs and there are times when one will want to be out of SDS.  Now … [Read More...]

400 Level

StockCharts for Basic Six

Readers who are following the ITA Risk Reduction model will note that only two of the "Basic Six" equity ETFs are currently above their 195-Day EMA.  Despite the market decline yesterday, VTI and VNQ held above the critical EMA.  IWN, VEU, VWO, and RWX either dropped below or stayed below their 195-Day EMA. To check your own holdings, go to this link for information. … [Read More...]

Euclid ITA Risk Reduction Update

This was the weekend for the Euclid examination.  Here is a report of what happened.  First, take a look at the current Dashboard for this portfolio shown below.. … [Read More...]