100 Level

Quotes from Charles Ellis

"It's not how good you are that counts, but how good you are compared with your competitors." "The really impressive characteristic of investment returns is that the variation in year-to-year rates of return on common stocks dwarfs the average annual rate of return on stocks." "Investment policy is the foundation upon which portfolios should be constructed and … [Read More...]

Active vs. Passive Investing

ITA Wealth Management readers will recall the five decisions discussed in "The Investment Answer," a short book authored by Daniel Goldie and Gordon Murray, who died of brain cancer last month.  Those five fundamental decisions are:  1) Do-It Yourself Decision, 2) Asset Allocation Decision, 3) Diversification Decision, 4) Active versus Passive Decision, and 5) Rebalancing … [Read More...]

300 Level

Holy Grail Portfolio Revised

Revising the "Holy Grail" portfolio is an extension of the blog entry posted earlier today.  The following QPP analysis is somewhat constrained by two new corporate bond ETFs (VCIT and VCLT) that have not been in existence three years.  Nevertheless, Platinum members will find this portfolio of interest.  The broad guidelines for putting this portfolio together is as … [Read More...]

Swensen Six: Comparing Optimizers

Using the simple Swensen Six, the following analysis compares the QPP and Hoadley optimizers when no constraints are applied.  The recommendations are quite different.  In both situations I used five years of historical data and assumed the market would grow at 7% annually. First, let's look at the QPP optimization.  With not constraints applied, the QPP recommends 100% of the portfolio be … [Read More...]

200 Level

Positioning the Maxwell, Euclid, and Madison

In preparation to launch the ITA Risk Reduction model for the Maxwell, Euclid, Madison, and possibly one or two more portfolios, the basic asset allocation is laid out below.  SDS is shown only as a possibility in unusual circumstances.  The percentages as shown apply only when the ETF price lies above its 195-Day Exponential Moving Average (EMA).  Such is not the case right now as … [Read More...]

Asset Classes: How Many Should You Own?

With much recent attention given to answering the money managers most perplexing question, what percent of the portfolio should be invested in each asset class, the whole idea of how many asset classes to include in a portfolio has been neglected.  William Bernstein answers the question this way.  "You might as well ask the meaning of life.  About all one can say is, more than three."  The major … [Read More...]

400 Level

Reducting Risk With The Euclid Portfolio

The 12th of the month is the day to closely examine each ETF used to populate the Euclid Portfolio, one of ITA Risk Reduction model portfolios.  While the markets have several hours before they close, it is highly unlikely any of the ETFs will change positions with their respective 195-Day Exponential Moving Averages (EMAs).  Here is the process I went through in my examination of the … [Read More...]

Let’s Get Serious About Reducting Risk

Most readers of ITA Wealth Management remember the dot com crash of 2001 and 2002.  If that memory faded, the devastating bear market of 2008 and early 2009 is still with us unless one was a shepherd in Patagonia.  I assume there are more than a few readers who still recall the bear market of the mid-1970s, and the long wait until the market suddenly woke up on August 12th of 1982 - only … [Read More...]