100 Level

Stock Market Myths

Brett Arends writes an interesting article, "Ten Stock-Market Myths That Just Won't Die" for the Wall Street Journal Digital Network.  While I agree with nearly all of his ten points, there are a few that need further clarification.  Point #8 focuses on diversification using mutual funds.  I agree with that part of the point, but not the section quoted … [Read More...]

Grandchildren: Rebalance Portfolio When Necessary

Keep the different asset classes within 25% of the target set up in the Strategic Asset Allocation plan.  In the little book, "The Investment Answer," rebalancing is the fifth critical decision for investors.  In my opinion, rebalancing is one of the minor hints of investing, particularly if new money is coming into the portfolio.  Just keep purchasing ETFs that represent … [Read More...]

300 Level

Dividend Oriented Stocks Are Limited Under The Latest Screen

Dividend Stocks of Interest From time to time I will post a few stocks for Platinum members interested in spicing up their portfolio.  While it is difficult to build a portfolio using only stocks and have that portfolio outperform the stock market over the long run, it is possible to pull down portfolio risk by adding companies that have a low correlation with the broad market.  … [Read More...]

Further Analysis of the Forty Stock Portfolio

Is the forty (40) stock portfolio optimized if one assigns 2.5% to each stocks?  Follow the optimized-momentum analysis to answer this question. Efficient Frontier:  A quick glance at the Efficient Frontier graph shows us that equal allocation to each stock does not provide the most optimized portfolio.  This does not come as a surprise.  The equal allocation was done for simplicity just to see … [Read More...]

200 Level

Portfolio Performance – 20 August 2010

For some reason, I expected to see greater decline in the Internal Rate of Return (IRR) values this week.  In a number of cases, the portfolios picked up a little ground on the performance of the VTSMX. Obviously, this is due to the broad diversity of the asset classes held in the portfolios. In a few cases, the ITA Index increased significantly and that is due to the addition of … [Read More...]

ITA Asset Allocation Philosophy

Do you ever ask why ITA Wealth Management is such a strong advocate for developing an asset allocation (AA) plan?  While academic studies of the late 1980s placed more importance on asset allocation than more recent studies, there still does not appear to be any portfolio models that outshine broad diversification through asset allocation. Further, complete and in depth studies as to the … [Read More...]

400 Level

Bullish Percent Indicators Show Positive Market Trends

Markets Are Bullish Bullish Percent Indicators (BPI) show increasing strength this week.  Everyone of the major markets improved as ITA readers can see in the following graph.  It is going to be interesting to see if this positive trend can be maintained throughout the summer months.  Don't plan on it. Move down to the 7/6/2012 row and compare each number with the number … [Read More...]

Examining Critical Risk Reduction ETFs

This is examination day for the Maxwell Portfolio and the market is in a swoon.  A few minutes ago I look at the "Critical Eight" ETFs and they are: VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  All are still priced above their 195-Day EMA, but some are getting close to crossing the EMA line.  For this reason, I will be waiting for the market to close before I make any … [Read More...]