Why I use Index Exchange Traded Funds (ETFs). Let me count the ways. Simplicity: It saves the work of stock analysis. Increases probability of success: A literature search of index investing vs. active stock picking will have the honest researcher coming down on the side of index instruments. The literature is replete with this information […]
Archives for 2014
Where To Begin If You Have Never Managed a Portfolio*
If someone asked you what to do with an inheritance or 401(k) sum of money, what advice would you give them? Here are some basic ideas for a novice investor. Assume the money is in your checking account and available to be invested. Open up a broker account with a discount broker. For example, go […]
Feynman Portfolio Study: Part 10-3
Momentum Weighted Portfolio A modification of the Rank Weighted (RW) Momentum Portfolio described in Part 10-2 of this Study is what I have called the Momentum Weighted (MW) Portfolio. This strategy uses a proprietary algorithm to calculate allocation weights that more accurately reflect the relative momentum of the individual assets rather than the simple Rank […]
Regression Analysis and The Schwert Effect
Regression Analysis is the investment communities effort to apply the scientific method to portfolio analysis. Let’s take a little time to explain what is meant by Regression Analysis. As you might remember from your math and science classes, data is plotted on an Y – X axis. For example, in physics it is common […]
Gounod’s Messe solennelle de Sainte Cecile
Gounod’s “Messe solennelle en l’honneur de Sainte Cecile” contains some of the most beautiful music one might ever want to hear. My favorite selections from this masterpiece are Sanctus and Benedictus, cuts five and six. I first heard Sanctus in the early 1950s when my parents brought home a vinyl recording that included the musical […]
“Markowitz” Projections During Great Recession
Readers who have been following the discussion on future return projections will find the following information of interest. Using the Hoadley “Efficient Frontier” software, I set out to see what the optimal projections would be for three different time periods. In each case I selected two years of historical data as that is the default […]
Basic Portfolio and Current ETF Rankings
The following data table includes the latest ETF rankings for 20 basic ETFs and the Buy-Hold-Sell recommendations. GLD is the only ETF under-performing SHY so I would avoid gold as an investment. ETF Rankings: The overall strength of this market is illustrated by the fact that not one of these ETFs is priced below its […]
Asset Allocation – Risk Parity Revisited: Part 2
In my previous Risk Parity Part 1 post I presented possible ways that funds might be allocated to momentum-ranked assets without any filtering to ensure diversification. One possible weakness of this simple form of momentum ranking is that highly correlated assets may rank similarly within the listings – this may be either a good thing […]
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