Projected Blood In The Street For Equities Using Three Years Of Delta Factor Data

If you are looking for Blood In The Street, look no further than the "Delta Factor" projections for an array of equity ETFs.  Keep in mind that the following projections are reversion-to-the-mean calculations and when one has witnessed a powerful bull market as we experienced since March of 2009, it will not come as a surprise to readers that future projections are unlike to continue at such a pace.  Therefore, prepare for retracement in equities.  While the future projections don't look that bad, my experience is that when both Delta and Delta Factor show this much red, the probability is not with the long-term investor. 

When I ran the same calculation using five years of data, the projections were not quite as dismal, so the time frame is critical.  Nevertheless, playing the odds, it will pay to be cautious until after the fall elections.

Followers of the ITA Risk Reduction (ITARR) model know we are out of foreign developed markets, foreign emerging markets, and commodities.  With a few portfolios, depending on when they were last reviewed, we are out of specific asset classes and in cash or income generating instruments.  This caution is in line with the following "Delta Factor" projections.

Reducing Risk Model Review: Where Are The ETFs Positioned Mid-Morning Friday June 22nd?

Market action this week moved a number of ETFs into the sell zone.  REITs (VNQ and RWX) and emerging markets sovereign debt (PCY) are still priced above their 195-Day Exponential Moving Averages (EMAs).

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Kiva Support From ITA Wealth Management

As I've mentioned before, profits from this blog go to support individuals or groups of individuals who have banned together to begin a new business.  It is called micro-financing.  For several years I was involved with MEDA Trust.  When the Afghanistan program, supported by the Canadian government, shut down, my wife and I had invested in over 300 businesses.  Since it was Kiva that first generated this idea to help those who do not have access to capital, I decided to continue this giving practice with a move over to the worldwide Kiva organization.

With the latest funding, we are involved in 13 businesses in the following countries: Tajikistan, Cambodia, Philippines, Guatemala, Kenya, Paraguay, Nicaragua, and Mexico.

A special thanks to all Platinum members for your support. 

Risk-Parity Portfolio: What Is It And What Does A Risk Portfolio Look Like?

Reducing Risk Through Risk-Parity

Risk-Parity: Have you heard of the term or seen reference to this style of portfolio construction?  Join the crowd if this is new to you, even though the Risk-Parity idea has been around for quite a few years.  Risk-Parity is an alternative approach to portfolio construction where assets are allocated based on risk rather than allocation according to cap size as we do here at ITA Wealth Management.  What does a Risk-Parity portfolio look like?  Below is an example of a Risk-Parity style portfolio.

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