Establishing an appropriate benchmark for a portfolio is essential if one is serious about investing. Avoiding portfolio bench-marking is an act of self-deception. Exactly what is the purpose of a benchmark and what are the requirements for a fair and reasonable benchmark. Here is one definition of bench-marking. In the investing world, the S&P 500 […]
Reviewing The Fundamentals of Investing
Search this blog site for “The Golden Rule of Investing” and you will pick up the basic ideas of Rule #1 of Investing. The Golden Rule of Investing is – “Save as much as you can as early as you can.” Burton Malkiel puts it this way. “The amount of capital you start with […]
Nine Critical Investment Decisions
Nine Critical Investment Decisions 1. The Decision to Save or Not to Save 2. The Go-It-Alone or Professional Manager Decision 3. The Decision to be a Passive, Active or Mosaic Investor 4. The Decision to Use Index Funds or Stocks to Populate the Portfolio 5. The Asset Class or Sector Class Decision 6. The Asset […]
Weekly Music Recommendation
Photograph: Arches National Park – Image captured just as the sun was rising. My music selection this week is Yo-Yo Ma playing Ennio Morricone. This CD includes some of the most beautiful and haunting compositions ever collected on one platter. As you listen to this music you will be drawn back to films as Ennio Morricone […]
Index vs. Passive Investing
Harold R. Evensky, in his Wealth Management: The Financial Advisor’s Guide to Investing and Managing Client Assets book, makes a distinction between index and passive investing. Few readers are unaware of the differences between active and passive management, but the subtle definitions between index and passive management deserves some attention. I subscribe to the principles […]
Goofus vs. Gallant
As a small boy, my family subscribed to a magazine called “Children’s Activities.” Each issue contained a story of two characters, Goofus and Gallant. We all wanted to be like Gallant, although we frequently found ourselves behaving like Goofus. Here is another Goofus/Gallant tale, this time with help from a publication written by the late […]
The Feynman Study: Part 3
In Part 3 of the Feynman Portfolio Study we look at the impact of rebalancing on portfolio performance. Part 2 examined the “Passive” – Buy and Hold – Investment strategy. Part 3 moves on to examine the “Dynamic” – Buy….Don’t Hold, re-balance – strategy. The Hoadley Portfolio Analyzer is used to determine the optimized unleveraged […]
The Feynman Study: Part 1
This first Part of the Study identifies the 10 Asset Groups and 18 individual EFTs that comprise the Feynman Portfolio and looks at the general market behavior, as defined by the Vanguard Total Stock Market Fund (VTSMX), over the 6 year period from 06/29/2007 to 06/30/2013. The VTSMX will be used as the reference, or […]
The Feynman Study
Lowell has invited me to author a series of posts on the ITA Wealth Management website that may be of interest to Platinum members interested in learning more about the practical application of some of the strategies, tactics and analysis tools that Lowell uses on the site and how these might be expected to perform […]
Occam’s Razor and Investing
Establish Basic Principles of Investing What does Occam’s Razor* principle have to do with investing? Furthermore, what is Occam’s Razor? The principle states that “Entities should not be multiplied unnecessarily.” The principle is attributed to the 14th century Franciscan friar, William of Ockham. Isaac Newton stated the Occam’s Razor another way with this rule. “We […]
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