In addition to Valentine’s Day, today is the 15th anniversary of the launch of ITA Wealth Management. Investing evolution is evident since my first blog back in 2008. As you may recall, the stock market was in free-fall that year and it extended through the first quarter of 2009. The first blog was written on a different platform as I knew nothing about WordPress in 2008. When I first started, I did not know what a domain name was. The term blog was a foreign concept. My education began with an excellent book, “WordPress for Dummies.”
In the summer of 2013 a Swedish hacker took down the host server where all my blog posts were stored. The host website did not have proper backups, nor did I so I lost over 1000 blog posts. Needless to say, I switched hosting sites and have been with Inmotion ever since.
What are some of the evolutionary investing changes over these past 15 years? The concept of asset allocation remains much the same. This investing strategy has been around for decades and was made particularly popular when William Bernstein wrote his first book, The Intelligent Asset Allocator. An example of the asset allocation investing model is the Schrodinger portfolio. Schrodinger is a classic asset allocation approach with one difference in that it is managed by a computer algorithm rather than a human. Launched as an experiment, the Schrodinger has become one of my favorite portfolios. One does nothing except save. All the work is done by a computer.
Dual Momentum™ came into existence in 2015 when Gary Antonacci published his book by the same name. McClintock and Pauling are the two ITA portfolios still using this investing model. At one time the Franklin also used this approach. I was disappointed in the results so the Franklin was moved to the new and most recent model, Sector BPI.
In 2020 Steven Bavaria wrote a book titled, “The Income Factory.” Portfolios following this investing model are the Huygens, Curie, and Newton. Only the Huygens is reviewed in detail here at ITA. These three portfolios are populated with Closed-End-Funds (CEFs). When possible, use this model with tax deferred accounts so as to reduce taxes.
Before going much further in describing a bit of ITA history, a lot of credit goes to David Faulkner (Hedgehunter) for his development of the Kipling spreadsheet. The Kipling is used to managed the Dual Momentum portfolios as well as the Relative Strength duo, Einstein and Kepler. Screenshots of the Kipling show up in nearly every blog post.
Another important name is Harry Stevens as he bails us out when Yahoo changes their download codes. Harry updates the ITA file, so critical in making the Kipling work as it should.
A few of you may remember the portfolio tracking software program that went by TLH Spreadsheet. The spreadsheet was permanently benched when Yahoo made a major change in granting access to price data. When the TLH Spreadsheet was no longer viable, I moved to the commercial program, Investment Account Manager software and have been using it ever since. I don’t like being at the mercy of programs that could easily vanish in a flash. Were this to happen, I would most likely revert to two of my favorite investing models and they are – the Copernicus and Schrodinger.
The most recent investment evolutionary example is the development of the Sector BPI Model. Four portfolios are currently operating under this model and they are: Carson, Franklin, Gauss, and Millikan. It is much too early to draw any useful conclusions as to how viable this model will be under various market conditions. Stay in touch if interested. To learn more, do a search of Sector BPI or go to the right-hand column and click on the Category. If you go the Category route you will find the oldest blog posts first. If you go the Search route, the newest posts show up first. I hope the difference is clear.
From the very beginning, ITA emphasized diversity of stocks through the use of no-load mutual funds and later Exchanged Traded Funds (ETFs). In the 1990s and early 2000s I went through my individual stock selection phase only to find the additional work did not produce sufficient results and the risk was too high. As iShares, and later Vanguard, launched ETFs, I moved to these investment vehicles and have not looked back.
Those readers who have been with me for a number of years have picked up the diversification of portfolios in addition to diversification of investment vehicles. While it is not necessary to use every model tracked here at ITA, I recommend using two to three different models as no single model works well in all market conditions. I have my own favorites and they tend to be the ones that are simple and easy to maintain.
A special thank you to the many readers who have visited this site over the past 15 years. The number is well over a million hits.