100 Level

Maxwell Portfolio Update: 9 October 2012

Since the last Maxwell update I sold and purchased a few shares in the blend areas to bring those asset classes back into balance.  Missing in the following dashboard is a recent purchase of VNQ, bringing REITs back into balance. … [Read More...]

Keeping Portfolios Simple

Three Sample Portfolios Complicated portfolios discourage investors and that is why I am attempting to simplify the portfolios tracked here at ITA Wealth Management.  There are many examples of possible portfolios in the literature, particularly in books by Faber-Richardson, Swensen, and Bernstein.  Let's start with one of the simple portfolios laid out by David Swensen. While Swensen does not … [Read More...]

300 Level

“New Normal” Portfolio With Risk Reduction Allocation Plan

Following up on the risk adjusted Ten ETF Portfolio analyzed yesterday, what does the "New Normal" group of stocks and ETFs look like when the same risk management algorithm is applied.  In this analysis I was able to stretch the historical period out over five-years.  The percentage allocated to the different stocks and ETFs look reasonable when the low variance BND ETF is not … [Read More...]

Thinking Through a Basic ETF Portfolio

Thinking through the process of constructing the following ETF rich portfolio several required specific goals be met. This material is not for publication elsewhere on the Internet. The portfolio needed to be simple.  While 15 ETFs are not exactly simple, neither is it overly complicated.  To simplify one could reduce the number of bond and treasury ETFs. All ETFs must be commission free … [Read More...]

200 Level

Rethinking Asset Allocation

One of the primary reasons for developing a well-diversified portfolio is to reduce risk.  This blog will focus primarily on the U.S. Equities portion of the portfolio as we still recognize the importance of including emerging markets, bonds, international real estate, etc.  The question to be analyzed is whether or not to include all "Big Nine" asset classes or can we do as well if the number of … [Read More...]

Ultra Capital Preservation Portfolio Revised

Last week I laid out the Ultra Capital Preservation Portfolio. That portfolio contained an error and in this blog post I make the correction.  Instead of using IWN, I meant to use IWM.  IWN is a value oriented ETF, and I intended to use the broader ETF, IWM.  Here is the QPP analysis on the portfolio I intended for the Ultra Capital Preservation. … [Read More...]

400 Level

Return and Risk Relationship

What is the relationship between return of a portfolio and the associated risk involved? Quoting from an “Active vs. Passive” paper I found in my files. “High potential returns always involve high potential risks. There are no low-risk/high-return investments. Investment risk comes in many forms but, to most investors, risk means the potential for losing investment capital and … [Read More...]

Latest Bullish Percent Indicators

Readers looking for the latest Bullish Percent Indicators will find them at this site.  These results simply underline what I've been saying for weeks - this is an overbought market.  One of the ways to protect capital is to implement the ITA Risk Reduction model or simply go to cash at some point when the market backs off these high levels.  That is an extremely difficult call to make.  I'm … [Read More...]