100 Level

Asset Allocation: Moderate Portfolio

Analysis of a Moderate Portfolio Changing the asset allocation from growth to moderate requires a shift in the percentages allocated to the six basic asset classes. In the following portfolio we lower the percentage allocated to the broad U.S. equities market, REITs, international, and emerging markets. The percentage allocated to bonds increases significantly. Were I not sticking with the … [Read More...]

High Fees Are A Problem

Three days ago I posted a link to The Portfolioist to draw your attention to how fees cut into your retirement account.  The American Association of Individual Investors (AAII) is also featuring this study.  Here is the AAII announcement that was sent out to subscribers on June 7th.       Dear Member, If you lost $155,000 to fees, how angry would you be? … [Read More...]

300 Level

Setting Constraints For Asset Classes and Individual Securities

In a recent blog I mentioned the importance of setting constraints on particular parts of the portfolio.  In this blog I'll go into more depth as to what I do when it comes to setting asset class and individual security constraints.  The reason for setting any constraints is to keep the optimizer in check so it does not run wild and create a nonsense portfolio.  The general idea is to provide some … [Read More...]

“New Normal” Portfolio Analysis

Nearly three months passed since I last ran an analysis on the "New Normal" portfolio. At that time the projected return was 7.7% when I assumed the S&P 500 would return 7.0% over the next year.  The projected uncertainty was a modest 13.1% giving a Return/Uncertainty ratio of 0.58.  This portfolio is well diversified and it shows with a Diversification Metric (DM) of … [Read More...]

200 Level

Portfolio Performance: 7 October 2011

While the past week was positive for all the portfolios on an absolute scale, large-cap stocks continued to perform better than globally diversified portfolios.  Therefore, portfolios tracked by the TLH Spreadsheet either remained even or lost a little ground to the VTSMX benchmark.  Tough times in Europe are not helping ETFs such as VEU or emerging markets, VWO. The following data … [Read More...]

Kepler Portfolio Review: 24 October 2011

Once more it is time to update the Kepler Portfolio.  Platinum members can see the Dashboard worksheet showing the asset allocation plan in the following screen shot. Note that both the Sortino and Retirement ratios are slightly negative.  The Internal Rate of Return (IRR) for the Kepler is trailing the VTSMX benchmark by 0.3%.  We should be able to make that up if and when the … [Read More...]

400 Level

Bullish Percent Indicators: 26 July 2013

While this past week did not seem to be a particularly strong for the stock market the Bullish Percent Indicators (BPI), for the most part, tell a different story.  Nearly every major market and sector increased the percentage of stocks with a bullish Point and Figure graph.  There were no changes as to who controlled the ball - the offensive of defensive teams. … [Read More...]

Risk

Portfolio Risk Risk is a messy word as it carries so many different meanings in the investing world. Here are at least three meanings of the term. 1. Committee members giving oversight to an endowment fund may define risk as follows. Will the endowment fund grow sufficiently to best inflation, grow a little, and still be able to throw off 5% to find their institution? That is asking a lot of a … [Read More...]