“Delta Factor” Update: October 27, 2011

Equity ETF Performance Projections

Based on popular demand, here is another "Delta Factor" update of the equity ETFs we use to populate our portfolios.  New readers to ITA Wealth Management would do well to search the blog for other "Delta Factor" posts.  A quick explanation is that the "Delta Factor" and "Conservative Delta Index" columns are probability projections as to how well the different ETFs are expected to perform over the next six to 12 months. In the following analysis, I used the last 45 months of data.

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“Decade” Portfolios

Age Appropriate Portfolios

Several weeks ago a reader wrote and asked me if I had "age oriented" portfolios on the blog.  While those were not the exact words, the question was designed to extract more precise portfolio direction than descriptions such as Einstein, Bohr, and Schrodinger.  Rather than build portfolios around high growth or conservative yield, I chose to go with different ages spanning a decade.  In the case of portfolio #3, I am using 20 years since this is generally a period when individuals are working and beginning to save seriously.   Yielding to this readers request, I am going to try to come up with five portfolios that will span these periods of life.

  1. Ages 15 – 25
  2. Ages 26 – 35
  3. Ages 36 – 55
  4. Ages 56 – 65
  5. Ages 66 – 100

There are several guidelines for each of the portfolios.

  • They need to be simple so anyone can put them together.
  • All portfolios will have a global outlook.
  • Portfolio volatility is given attention, particularly for older investors.
  • Consider these portfolios to be "framework" portfolios.  This means individuals will tweak the percentages to fit their own requirements.
  • Portfolios will be put together using non-managed ETFs.  Stocks are eliminated, but might be added by individuals managing their own portfolios.
  • Portfolio construction will assume new money is added each month with exception of portfolio #5.  The fifth portfolio will be a retirement portfolio.
  • Where possible, I will use commission free ETFs available through TDAmeritrade.
  • Portfolios 3 – 5 will pay more attention to diversification.

Look for the different portfolios over the next two weeks, if not sooner.

Einstein Portfolio Update: 27 October 2011

Several moves took place over the last few weeks in an effort to bring more asset classes into balance within the Einstein Portfolio.  Shares of VO and VB were sold in order to bring mid-cap and small-cap blend within the 20% threshold limits.  Shares of the International bonds (BWX) were added and we made a few small purchases in IEF and BND to bolster the bonds asset class.  Bonds is one of two asset classes still below target as you can see from the Dashboard worksheet below.

Platinum membership is available for $5.00 per month.  Learn how to use the TLH spreadsheet.

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