100 Level

Portfolio Rebalancing: Essential or Overrated

Portfolio rebalancing is as old as asset allocation and it is one of the cardinal rules of portfolio management.  It is an action or discipline used by money managers to keep the percentages of the various asset class within stated target limits.  Rebalancing policies assure the investor that the portfolio continues to be well diversified.  If one never rebalances the market will … [Read More...]

Five Essential Investment Decisions

Critical Investment Decisions 1.  Save Follow "The Golden Rule of Investing."  Save as much as you can as early as you can.  If you are not saving, why are you reading this blog?  Investing ideas only follow after one has developed the discipline of saving a percentage of each paycheck. 2.  Education Educate yourself by reading several of the Top Ten Investment Books listed on this … [Read More...]

300 Level

“Holy Grail” List of ETFs for Momentum-Optimization (MOM) Portfolio

Readers who have been following The Feynman Study will be interested in this list of ETFs that can potentially be used to build a "momentum" style portfolio.  What I've done is to include the 18 ETFs from the Feynman Study, add four sector ETFs that currently outperform both SHY and VTI, and included a few options that might be useful in a bear market.  If you missed some prior references related … [Read More...]

Bohr Portfolio Review: 9 November 2011

Once more the Bohr Portfolio is up for review.  This three-year old portfolio has a very good record of performance when compared with the VTSMX benchmark.  As one can witness from the Dashboard screen shot below, numerous asset classes are out of balance.  With limited cash available, it is not easy to keep all the asset classes in balance, and since so many of the ETFs we use are … [Read More...]

200 Level

Smartest Portfolio You’ll Ever Own?

Below is a portfolio I extracted from Daniel Solin's recent book, "The Smartest Portfolio You'll Ever Own."  Before I run a QPP analysis on one of the suggest portfolios, let me point out that the BWZ ETF did not have a three-year record.  As a result, the following analysis runs for only 31 months.  Under current market conditions, my preference is to use 48 … [Read More...]

Active vs. Passive Investing: Part 8

Section Eight of the Active vs. Passive article includes the following criticism of index investors. Some indexers claim superiority by simply dismissing the reported returns of active investors. They claim these investors do not know how to properly measure returns - either on a year's basis, or multi-year basis. But no proof is presented for this position other than personal anecdotes. … [Read More...]

400 Level

Improving On The Simple Nine Global ETF Portfolio

While there are advantages to keeping a portfolio simple, there are also disadvantages.  For example, one will miss opportunities by not including asset classes that have been shown by Fama and French to add value to the portfolio.  Namely, value asset classes such as small-cap value (VBR).  We don't want to eliminate asset classes just to keep the portfolio simple.  The Ranking data table shows a … [Read More...]

Risk Parity Analysis of Modified “Ivy-10″ Portfolio

When investors populate their portfolios with stocks or equity ETFs, it is easy to forget just how exposed the portfolio is to risk.  The following analysis is a reminder of the high risks we take when constructing portfolios.  To know a little more about Risk Parity, check out this link. … [Read More...]