100 Level

Portfolio Development

Thinking Through Portfolio Construction Within the last few weeks I read a post on the Internet that I threw into my "fear bag."  The thesis of the post focused on Decision One as articulated by Goldie and Murray in their little book, "The Investment Answer."  The writer claimed the small investor was courting disaster if they managed their own money.   Readers … [Read More...]

ITA Wealth Management: Adding Investment Knowledge

  ITA Wealth Management Blog: Unique Contributions     What makes the ITA Wealth Management blog different from other investing blogs? 1. ITA provides examples of actual portfolios of various size and different launch dates.   2. Platinum members have access to eight different portfolios showing all transactions, portfolio performance, benchmark performance, … [Read More...]

300 Level

Risk-Parity Portfolio: What Is It And What Does A Risk Portfolio Look Like?

Reducing Risk Through Risk-Parity Risk-Parity: Have you heard of the term or seen reference to this style of portfolio construction?  Join the crowd if this is new to you, even though the Risk-Parity idea has been around for quite a few years.  Risk-Parity is an alternative approach to portfolio construction where assets are allocated based on risk rather than allocation according to … [Read More...]

Exactly What Is The Momentum-Optimization Model?

Exactly what is the Momentum-Optimization Model (MOM) and how does it work?  The very first step in this process is to define what securities one wishes to use to build the portfolio.  This is easier managed and accomplished with index investments vs. selecting individual stocks.  For example, one is likely to choose VTI to always have some role in the portfolio whereas a well-known stock such as … [Read More...]

200 Level

Rebalancing Portfolio: Blending Dashboard and Optimizer

Now that an optimizing tool is available, how does one rebalance a portfolio by combining the output of an optimizer with the Dashboard guidelines?  The larger topic is one of asset allocation so I will start with the following Dashboard that defines an asset allocation plan. Dashboard:  Assume the following Dashboard lays out the Strategic Asset Allocation plan for a portfolio.  Only pay … [Read More...]

Update of Schrodinger Portfolio: 20 January 2012

The Schrodinger Portfolio was scheduled for an update yesterday, but I got caught up in activities surrounding the Madison Portfolio, one of the ITA Risk Reduction portfolios.  Long-time readers know the Schrodinger as the most passively operated portfolio I track.  It is rare we make a trade in this eleven-year portfolio.  Platinum readers can see the asset allocation plan in the … [Read More...]

400 Level

Retirement Ratio

While on vacation I spent time thinking what I would call the risk ratio I am now using to see if the portfolio meets the Return/Risk requirement. This ratio was called the ITA Ratio but that did not convey any useful information.  I considered the title to be a temporary place holder until I came up with something more expressive. The ITA Ratio will now be known as the Retirement Ratio as it … [Read More...]

ITARR Style Portfolios: What Next?

Now that we are near the end of the month, what are the plans for the Maxwell, Euclid, and Madison portfolios?  A price check this morning show all seven basic ETFs are well under their 195-Day EMAs.  Should this continue until November 30th, and I expect that to be the case, we will not make any changes in these three portfolios even though we do hold partial positions in VTI, IWN, IGE, … [Read More...]