100 Level

Optimization of Stock Portfolio

Now we take the same list of stocks as used in the prior blog post, only this time I optimized the portfolio by requesting for a maximum Return/Risk ratio.  In the first screenshot readers will see the QPP analysis.  In the second slide, note the correlation matrix and in the third I show the constraints placed on the portfolio of stocks. QPP Analysis:  The following asset allocation gives up … [Read More...]

New Portfolio Study Available

ITA Wealth Management readers and subscribers who are a tad lax in keeping up with all the posts on this blog may have missed the significant beginning entries on the Feynman Portfolio Study.  To catch up just go to the right-hand sidebar and under the Categories pull-down menu, select Feynman Portfolio.  This will take you to the articles on this analysis, beginning with the first one. Do to … [Read More...]

300 Level

Portfolio of Actively Managed Mutual Funds

The following Quantext Portfolio Analysis contains actively managed mutual funds and the portfolio is designed for a 40-50 year old investor.  Keep in mind a few assumptions and expectations.  1) In this analysis the S&P 500 is assumed to grow at 7.0% over the next few years.  2) When putting together an array of securities we expect the projection will exceed 7.0% by 100 basis points.  3) The … [Read More...]

Portfolio Management Suggestions

Before outlining portfolio management suggestions, I'm assuming ITA readers have a savings and investment plan in effect.  For saving suggestions, search for "The Golden Rule of Investing" and related topics.  There are a number of blog entries related to preparing for retirement, and the earlier one begins retirement planning the better. After establishing a savings plan, … [Read More...]

200 Level

Advantages to Mosaic Investing

It comes as no surprise to long standing Platinum members that most equity ETFs are highly correlated.  The basic ones we use to populate many of our portfolios show correlations of 80% or higher when analyzed using the Quantext Portfolio Planner (QPP) software.  To reduce portfolio volatility and increase the Diversification Metric (DM) we have several choices.  One common approach … [Read More...]

Retirement Planning Mistakes: Mistake #1

Mistake number one in my book is failure to save or to not follow The Golden Rule of Investing.  Open up a spreadsheet and run your own calculations for the following classic comparison. As a nineteen year old you have the foresight and financial opportunity to save $2,000 per year for eight years.  After saving $16,000, for some reason you stop. This $16,000 investment manages to earn the … [Read More...]

400 Level

Risk Reduction Model Check

Readers using the ITA Risk Reduction Model with one or more portfolios, keep a check on the key eight asset classes.  The ETFs I use are as follows:  VTI, IWN, VEU, VWO, VNQ, RWX, DBC, and PCY.  All are commission free ETFs for TDAmeritrade customers. … [Read More...]

“Delta Factor” Projections for Bond ETFs

"Delta Factor" projections for bond ETFs are grim for the next few months.  All but BWX are negative in the Delta column.  SHV only rounds to zero as it is also negative.  While a number of bonds are showing a "Delta Factor" of Hold, the bias or tilt is definitely down as shown by the Delta column.  The general prediction is to hold these ETFs with great … [Read More...]