100 Level

Searching for the Strategic Asset Allocation Holy Grail

Establishing a strategic asset allocation (SAA) plan for a portfolio requires at least two major decisions.  1) What asset classes should be included in the portfolio.  2) What percentage of the total portfolio is allocated to each asset class.  Decision number two is the more difficult of the two.  Where do I come up with the various asset allocation plans found in the various … [Read More...]

Active Management: A Mistake

Much is written about active vs. passive management. Harold Evensky defines active management in his book, "Wealth Management" and I quote. "Active Management is the art and science of security selection based on a belief in a manager's ability to consistently and accurately evaluate current and/or future events better than other investors. The core philosophical basis is … [Read More...]

300 Level

Bohr Portfolio Review: 27 July 2011

Few changes occurred in the Bohr Portfolio since the last review.  The asset allocation remains the same, and as readers can see in the first screen shot, most of the asset classes are in balance.  Excluding cash, only Small-Cap Growth and Bonds/Income are out of balance.  Limit orders are in place to correct these imbalances, but as I wrote last weekend, I lowered the … [Read More...]

Portfolio Performance Data: 18 February 2012

All portfolios showed gains this week on an absolute scale, but the relative movement when measured against the different benchmarks was mixed.  The Kepler held par with respect to the VTSMX and picked up a few tenths of a percent on the ITA Index.  The Kenilworth pulled ahead of both benchmarks.  Seven of the eleven portfolios held their own or gained ground on the VTSMX.  … [Read More...]

200 Level

Retirement Ratio: Portfolio Performance and Uncertainty Measurement

What is the Retirement Ratio (RR)?  I never heard of such a ratio, at least as it is defined below.  Before going into an explanation, let me digress and address similar ratios.  Portfolio performance measurements that combine both return and risk are readily available to investors.  The Sharpe ratio is perhaps the best known "efficiency ratio" where it measures the … [Read More...]

Three Asset Class Portfolio

Suppose someone told you to build a portfolio, but the upper limit of investments was three.  You could pick three stocks, three mutual funds, three ETFs, or any combination of three investments.  What three investment vehicles would you select, and why would you pick these three? None of us wants to be limited to only three investments, but that is the challenge of this … [Read More...]

400 Level

Bullish Percent Indicators Show Markets Continue to Weaken

Bullish Percent Indicators (BPI) provide us with a broad look at large index and sector movements for the U.S. Equities market.  While I do not use either the index or sector tables as trading tools, I do watch them for general market trends and as guides to determing when the market is over bought or over sold.  Right now the market is over bought and weakening. Index BPI:  One significant … [Read More...]

Retirement Target Return Revisited

Retirement Target Return Investors always have a goal for their portfolio, whether stated directly or indirectly.  For some it may be as simple as to not lose money.  For others it is to outperform a benchmark.  Exactly what is the Retirement Target Return (RTR) and how does it fit in with portfolio risk management?  RTR is one of the factors found in the Retirement Ratio (RR) … [Read More...]