100 Level

Portfolio Uncertainty: Pay Close Attention

"If the physical world is so uncertain, so difficult to know precisely, then how much more uncertain and unknowable must be the world of money?  Finance is a black box covered by a veil." - Benoit Mandelbrot It almost goes with out saying - investors pay more attention to return than they do to risk or portfolio volatility.  At least this is the case until a bear market strikes as it did in … [Read More...]

VWO And The ITA Risk Reduction Model

During this most recent market dip, if one asset class needed protection, it was emerging markets.  Just how did our Tactical Asset Allocation (TAA) or risk reduction model work with the VWO ETF.  Here is the current price and 195-Day EMA graph for emerging markets (VWO).  This morning the 195-Day EMA is $40.80. Since I rotate my review of different portfolios, the selling points … [Read More...]

300 Level

Portfolio Management

Developing Portfolio Policy Portfolio management begins with a well considered Portfolio Policy. Basic portfolio plans include the following: Asset classes to include in the portfolio Percentage to invest in each asset class Investments to populate asset classes Portfolio monitoring method Projected return analysis Projected risk analysis Selection of appropriate … [Read More...]

Einstein Portfolio Review

Since the last update 33 days ago, shares of VWO, EMB, DBC, and GTU were sold and shares of VOE and VTI were purchased.  The Hoadley Optimizer recommended eliminating EMB, DBC, and GTU and we still need more shares of VOE in the portfolio. Einstein Dashboard:  Due to some action this past month, this Dashboard looks a little bloody.  I'll be readjusting the Strategic Asset Allocation plan to … [Read More...]

200 Level

Schrodinger Portfolio Review: 3 July 2012

Passive is the key word when it comes to managing the Schrodinger Portfolio.  No transactions occurred over the last several months except to add dividends to the cash account.  All asset classes are in balance as shown in the following Dashboard worksheet.  We use sixteen asset classes in this portfolio as I have never added international bonds to the mix. … [Read More...]

Kepler Portfolio Review: Strategic Asset Allocation Changes

Review time has arrived for the Kepler Portfolio and I am making changes in the Strategic Asset Allocation plan.  Platinum members will find two Dashboards presented so you can easily see the changes I am making. … [Read More...]

400 Level

The Condition of Bonds Using Delta Factor

What is the current condition of bond ETFs and should they be part of the portfolio?  To examine this question one method of analysis is to apply the Delta Factor.  When I run a reversion-to-the-mean analysis on bonds, I use AGG as the reference or standard.  For equity ETFs I use the VTSMX total stock index fund.  In the following table each bond ETF is compared with the … [Read More...]

Understanding Feynman Portfolio Study Part 6-4

The following material is presented as an example to make sure I, and other readers, understand the significance and method of implementation for the Feynman Portfolio.  I am going to choose a different set of assets so I am not duplicating the example put forth in Part 6-4. Ranking of ETFs:  Here we have a list of possible securities to invest in a portfolio.  Using SHY as the "cutoff" we have … [Read More...]