Asset Allocation – Is it really important? 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. […]
The Asset Allocation Hoax
Prominent asset allocation critic, William Jahnke, titled his 1997 attack on the Brinson et. al. (BHB) papers, “The Asset Allocation Hoax.” Jahnke’s criticisms of the two papers are many. He argues the authors do not focus on the proper problem, they report the wrong number, cost is not considered, and they give the wrong advice. […]
Schrodinger Review: A Passive Approach to Investing
Long-time readers know the Schrodinger is the best example on this blog of a passive (index) approach to investing. No cluster analysis is used, but instead this portfolio follows a Strategic Asset Allocation (SAA) plan as shown in the following Dashboard. Schrodinger Dashboard: All asset classes with exception of Commodities (DBC) and Cash are within […]
Commodities: What Percentage Is Required For Diversification?
At a recent investment meeting a discussing came up around the need to include Commodities in a portfolio and what percentage is required to shore up a portfolio in case inflation takes off or we encounter another market correction. Keep in mind that Commodities, as an asset class, is considered an inflation protector. David Swensen, […]
Asset Allocation: How Important to Portfolio Returns?
Asset allocation was considered the Holy Grail of investing back in the 1990 during one of the strongest bull markets on record. The concept of building a portfolio using a wide variety of asset classes received a boost after the Brinson et al. papers were published in 1986 with a followup in 1991. Over the […]
Beginning Investors: A Followup On The 3 x 5 Card
Providing sufficient information for beginning investors to start building a portfolio is a bit like throwing someone in the lake and telling them to swim. Where does one start building vocabulary. The 3 x 5 card blog post is a start and this blog expands on those basic ideas. The very first step to to […]
Asset Allocation: Keeping It Simple
The following asset allocation article was sent to me by Leland Feigner, and I think it merits a special post as I expect the Comment section will be overflowing in a few days. I have yet to digest the entire article, but plan to do so tomorrow. The Robust Asset Allocation (RAA) article spends some […]
Pasteur Portfolio Review: 24 December 2015
As one of the three passively managed portfolios, this will be a short review as no trades occurred since the last update in November. As the Pasteur currently stands, Large-Cap Value, Mid-Cap Growth, and Cash are above target at the expense of Bonds and Income ETFs. Adjustments to bring all asset classes into balance will […]