“Swensen Six” Series Coming



Be sure to link to http://itawealth.com this coming week to read the three-part series on the “Swensen Six” portfolio.  To get you started on what the “Swensen Six” is all about, check out these three articles.





To read the three articles over on http://itawealth.com you will need a Platinum membership.  These articles are all about portfolio management.

How Important Is Asset Allocation?

My favorite investment writer is William J. Bernstein, author of several investment books and the editor of the Efficient Frontier.  This morning I was scanning the data files of ITA Wealth Management and found where one reader clicked on one of the older articles from Bernstein’s Efficient Frontier. [Be sure to read the section, 'Let George Do It.']  I myself have written about the Brinson et. al. articles, published back in 1986 and 1991.  Those two articles are part of an asset allocation file 5.0 cm thick, stored in my filing cabinet.  Since those original Brinson papers were published, Ibbotson and Associates conducted several follow-up studies.  Their results as to the importance of asset allocation are all over the map.  The latest results, and I may not be up on the most recent studies, conclude that the broad movement of the market controls 75% of the movement of the portfolio.  The remaining 25% is divided equally between asset allocation and security selection.

The problem I’ve always had with these studies is that they segment asset classes into equities, bonds, and cash.  To my knowledge, no study breaks the asset classes down any further.  Why not divide equities into U.S. Equities, developed international markets, and emerging markets.  Divided bonds between U.S. Bonds and International Bonds.  Should anyone ever run into such a study, be sure to pass along the reference.

Bernstein sums up the asset allocation issue succinctly with this message to the small investor.

“So how important is “asset allocation?”  Wrong question.  More relevant to the investor is the question of how worthwhile professional efforts at both asset allocation and security analysis really are. The film “Less Than Zero” comes to mind.”

For small investors the answer seems to be:

  1. Decide how much equity you can stomach, and adjust your stock/bond allocation accordingly.
  2. Allocate your stock assets among a wide variety of global regions in a prudent manner.
  3. Let George do the rest while you get on with life’s more salient matters.

Can you stomach a stock/bond mix of 80/20, 70/30, or 60/40, knowing that even with 40% investing in bonds, over 90% of the portfolio volatility is linked to the 60% stock holdings?   For more on portfolio risk, reread this article, and then look up Risk Parity under the Categories section.

Aristotle To Use VTI/TLT Ratio

Check this blog to see how the Aristotle Portfolio is going to be managed using ideas from Benjamin Graham.


If you have not recently checked out the upgraded ITA blog, check the URL under my name.



New WebSite: http://itawealth.com

Please register on the new site using real first and last names.  Registrations that do not show up as a Guest Registration will be purged from the site.  Click on the ITA Blog tab and find the registration option on the right sidebar.


Happy New Year

Happy New Year


You have reached the original ITA blog.  The new site is located at http://itawealth.com so please register on that site for all the new information.  This site will most likely vanish on May 1, 2014.


Lowell Herr

Ranking Dividend Aristocrats

Here is an article on ranking dividend aristocrats.



New Posts On New Site

The latest information on Bullish Percent Indicators is now available on this site.  In a few hours the portfolio performance data will be available to Platinum members.

Maxwell Update

An update of the Maxwell was just posted over on the new site.  Once more, Platinum members are requested to register at http://itawealth.com if you have not already done so.



Weighted Ranking SS Update

If your portfolio is approximately $100,000, the following percentages and shares are laid out for investors going into this coming week.  We first start with the most recent rankings data to start the week.  This information applies to all Platinum members regardless the size of your portfolio.

ETF Rankings:  The following ranking is current as of 9/27/2013.  Note the change in the starting date as a 182 day differential ends up starting on a weekend.  That starting date will be adjusted tomorrow or Tuesday when we can move away from a weekend starting date.

[Read more...]

Forums Added to ITAWealth.com site

Just another reminder for Platinum members to sign up over on the new ITA website at http://itawealth.com.

Check out the Forums section of the new site.  You will find a Forums tab on the navigation bar over on the right-hand side of the page.  Click on Forums and if you have a Forum you would like to start, let me know and I will set it up.

Lowell Herr