Sydney Morning Herald Article on Hedge Funds

There are several reasons for not using hedge funds.

  1. Unless one can hire a manager who is consistently in the top quartile forget it.
  2. Fees are much too high. Generally 20% of profits plus 2% of assets.
  3. The funds lack transparency.  Who knows what the manager is doing.
  4. Do I need to mention Jon Corzine?
  5. Most of us do not have sufficient wealth to even consider a hedge fund manager.
  6. If the above five are not sufficient, then read this article.

ITA Risk Reduction Update

Photograph: One of the "Painted Ladies" in Eureka, California

The broad market is taking a 3.5% hit today, not a trivial move to the downside.  Those of you following the ITA Risk Reduction (ITARR) model now have the opportunity to see the benefits in action.  While we are not fully employed with this model, holding off with VEU and VWO purchases worked quite well as both ETFs are getting crushed today.  VTI and VNQ are the two ETFs we did purchased for the Maxwell and Euclid portfolios and both are hovering around their 195-Day EMA.  Remember, we neglect these ETFs for a full 30-days after purchase as we don't want to get involved in the whipsaw game.  For a review of the ITARR model, check out the following link.

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Bohr Portfolio Review: 9 November 2011

Once more the Bohr Portfolio is up for review.  This three-year old portfolio has a very good record of performance when compared with the VTSMX benchmark.  As one can witness from the Dashboard screen shot below, numerous asset classes are out of balance.  With limited cash available, it is not easy to keep all the asset classes in balance, and since so many of the ETFs we use are still below their 195-Day Exponential Moving Average, there is no great rush to dive in and buy shares.

If you are a Platinum member and cannot access the following information, please contact me so I can clear up the problem.  I suspect one member is locked out of the restricted material.

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