100 Level

Please Turn Off CNBC!

CNBC is only a place holder for all types to Wall Street media hype.  Eschew information that is designed to keep you unsettled, nervous, and makes you feel as if you are doing something wrong and change is necessary.  Too much investment information is not necessarily a good thing for portfolio management.  If financial news sources had your best interests in mind, you would find them so boring … [Read More...]

Constructing Your First Portfolio

Faced with the task of building a portfolio from scratch, what are the first steps?  Assume one saved a bit of money, read a few of the Top Ten Investment Books, and is convinced of the wisdom of index investing. Read the following questions and answer them as best you can.  Don't be fearful of making a mistake or feel these decisions cannot be reversed.  Not only can you change them, I … [Read More...]

300 Level

The Return/Uncertainty Ratio

Formerly, the title of this post would have been the Return/Risk Ratio.  However, Risk carries many meanings so I am switching to Uncertainty to describe portfolio volatility.  The whole notion of Return/Uncertainty is at the forefront of my thinking today since this is the end of the first quarter for 2011.  Platinum members using the TLH spreadsheet will need to update the SR … [Read More...]

Kenilworth Update

Kenilworth Review A few shares of VTV were added to the Kenilworth Portfolio this morning in order to begin the process of pulling that asset class into balance.  Very little cash is available and that is why we are buying shares in such low quantities.  Fortunately, we no longer need to worry about commissions if we select ETFs that are among the select group from TDAmeritrade. As … [Read More...]

200 Level

Which ETFs To Use When Constructing A New Portfolio

Which ETFs do I recommend for different asset classes when putting together that first portfolio?  The first move is to decide which asset classes to use.  Twenty-five months ago I posted this Asset Allocation blog and little has changed over that time.  One error in the table is the position of VEA.  That ETF should be included in the Developed International Equities box rather than the Emerging … [Read More...]

ITA Portfolio Performance Data Sheet: 16 November 2012

While all portfolios declined in value over the past two weeks, the good news is that every portfolio, without exception, gained ground on both the ITA Index and VTSMX benchmarks.  Yes, you read correctly.  Every portfolio picked up basis points on both critical benchmarks. While none of these accounts are particularly set up as defensive portfolios, all reacted this way as none declined as … [Read More...]

400 Level

Bonds Add Little Other Than Diversification

Using Delta Factor analysis, bonds will add little growth to portfolios over the next six to twelve months.  Their main benefit is to bring down portfolio volatility and I believe one can do a better job of risk reduction with some highly selected stocks and/or implementation of the ITA Risk Reduction (ITARR) model.  Below is the evidence for my tepid view on bonds going forward. Platinum … [Read More...]

Gauss Portfolio Review: Risk Reduction Model Update

At the end of each month the Gauss Portfolio comes up for its ITARR review.  Over the past few days I had some concerns that one or more of the eight critical ETFs would be sold out of the Gauss.  Fortunately, this did not happen as the closing prices today showed each of the ETFs priced above their 195-Day Exponential Moving Averages.  We may find a different situation when the Maxwell is … [Read More...]