Schrodinger Portfolio Review
It is time to review the Schrodinger Portfolio, perhaps the most "passively" managed portfolio tracked here at ITA Wealth Management. We still hold ETFs purchased back in late 2000 and early 2001. The asset allocation plan has changed very little over the ten plus years of operation. During this period a few iShares were sold as we moved assets over to lower cost Vanguard ETFs representing the same asset classes.
Below is the current Schrodinger Dashboard. I reduced the Threshold percentage from 25% to 20% and we will see the asset classes are in balance with exception of bond & income. Threshold is the percentage target limits used. For example, take the International Investments asset class where we allocate 15% of the total portfolio. So long as our investments in this asset class stay within 0.15 x 0.20 = 0.03 or 3% to the upside or downside, we say the asset class is in balance. Therefore our target limits range from 12% on the low side to 18% on the high side.
On the Dashboard worksheet of each TLH Spreadsheet we show a Rebalancing box. This data box provides a quick look as to how many shares are required of the representative ETF for each asset class. I think I laid out what is meant by a representative ETF, but I should present that again for interested readers. Check out the rebalancing box in the following slide or screen shot.