100 Level

Five Investing Basics

The Basic Rules of Investing Readers of "The Investment Answer" will remember the five decisions laid out by Daniel Goldie and Gordon Murray.  If you need a quick reminder, go to this site for a review.  You will recall I disagree with Goldie and Murray on the conclusion of the first decision of portfolio management.  Will you do it yourself or will you seek … [Read More...]

Sample Portfolio Requested By Platinum Member

The following set of tickers and percentages were sent to me for analysis.  I used five years of historical data and set, as I generally do, a 7.0% return projection for the S&P 500.  I used TIP (1.0%) for the cash holding.  That choice has little impact on the final projections.    Below is the analysis data.  Instead of me writing up my observations, I'll … [Read More...]

300 Level

QPP Analysis of “Top 17 Stocks”

Selecting the recommended stocks from the 40 securities listed in a prior blog, here is the Quantext Portfolio Planner (QPP) analysis of those 17 stocks.  Included is the Correlation Matrix graph and for good measure, I threw in the "Delta Factor" projections.  Since there were fewer stocks than in the original analysis I was able to show all the correlations. QPP Analysis:  As in the prior QPP … [Read More...]

Portfolio Review: Bohr

Bohr Update Review time is here again for the Bohr Portfolio.  No purchases were made thus far this month as most the asset classes are in balance.  I don't plan any changes in commodities as that asset class is only out of alignment by 68 shares of GSG.  What I might do is exchange GSG (heavily oriented toward oil) and purchase DBC, an ETF with a more even distribution of … [Read More...]

200 Level

Why Sector Allocation Is Diversification Deficient

There are investors who build their portfolios around sectors instead of asset classes.  The following optimization shows why sector allocation comes up short when it comes to portfolio diversification.  As a reminder, asset classes cover all sectors, but sectors do not cover all asset classes. … [Read More...]

Asset Allocation Plan for ITA-RR

Below is the asset allocation plan for the new risk reduction portfolio.  Names suggested thus are Dirac and ITA-RR.  This portfolio would be appropriate for investors age 35 to 50 as the allocation to bonds is a tad over 30%. This allocation, combined with the 10% commodity allocation holds the projected volatility under 15%. … [Read More...]

400 Level

Equity “Delta Factor” Probability Projections

Approximately once a month I publish either the "Delta Factor" probability projections for equity or bond ETFs.  Considering the recent strength in the markets it seemed like a good time to run the analysis again and see if there are any asset classes or ETFs that have a reasonable probability of performing well over the next six to twelve months.  You may be surprised at the … [Read More...]

“Delta Factor” for Sector Portfolio

What is the "Delta Factor" projecting for the eleven sectors of the market?  Based on recent analysis, the international market is over bought.  Is the same true for the U.S. Equities market? Checking out the data table below, three years of historical data indicate the same over bought condition exists for the U.S. market. … [Read More...]