Arches National Park Painting.
This blog post is a review for long-time members. New members may not be aware of the different investing models used here at ITA. The following list does not include the portfolios reported on by Hedgehunter.
ITA Wealth Management Portfolios
- Schrodinger Portfolio: I begin with this one as it is the easiest to manage. The Schrodinger is a Robo Advisor portfolio housed at Schwab. Schwab calls these portfolios, Intelligent Portfolios as they are managed by a computer. All one needs to do is save and continue to move available cash into this account. Schwab does all the rest. There is a rather long history to this passive portfolio so check it out by searching for Schrodinger.
- Copernicus Portfolio: The Copernicus is a buy only portfolio where new cash is invested strictly in U.S. Equities. The ETFs of choice are: ESGV, SPY, VTI, and VOO. Any of the four work. When cash is available, purchase as many shares of these ETFs as possible. That is it. The Copernicus is a very easy portfolio to manage. I highly recommend the Copernicus for young investors with a 30 to 40 year retirement saving plan in mind.
- Huygens Portfolio: This portfolio, along with the Curie and Newton, are constructed around Closed-End-Funds (CEFs) where income is the primary goal. I do not report the financial details of the Curie and Newton, although return percentages and risks are reported when I publish the performance results. This happens about once a month. The Huygens portfolio attempts to mirror Steven Bavaria’s approach articulated in his book, The Income Factory. This model is best used with tax deferred accounts.
- Bohr and Bethe Portfolios: These are growth and income portfolios where equities provide the growth and CEFs provide the income. These two portfolio are middle of the road accounts that are a blend between the Copernicus and the Huygens.
- Pauling and McClintock: These two portfolio use the Dual Momentum (DM) model developed and advocated by Gary Antonacci. He has written a book by the same title, but it is rather expensive. The concept behind the DM model can be condensed into a one or two page paper. If you follow the posts of these two portfolios you will quickly learn how to use this investing model. The Kipling spreadsheet is most instructive in managing these two portfolios.
- Einstein and Kepler: These two portfolios are classified as Relative Strength or Relative Momentum portfolios. To manage these two portfolio requires using and understanding the Kipling spreadsheet. A historical review of these two portfolios aid interested readers as to how to use the Kipling.
- Carson, Gauss, Franklin, and Millikan: These four portfolios are built around the most recent Sector BPI investing model. It will take several Buy and Sell cycles to evaluate this model, but early results are promising. The Sector BPI Model is the creation of the author of this blog and as such is a unique approach to portfolio management. Interested readers will find a new article on this approach at this Seeking Alpha site.
Diversification is one of the driving forces behind all the various portfolios and that is why we choose to use ETFs rather than individual stocks. In addition to diversifying across the stock spectrum, we also advocate portfolio diversification as no one investing model works in all market conditions. In this post seven different models are given as examples of how one might go about developing the “family portfolio.” I doubt any one person wishes to use every model, but I highly recommend branching out and using more than one single model. If time is a constraint, which it is for those still working, concentrate on the Copernicus and Schrodinger.
Comments and questions are always welcome. Place them in the comment section provided below.
ITA Portfolios: Summarizing Investing Approaches
Buying Guidelines For BPI Model Portfolios: 9 December 2022
New Carson Launched: 4 November 2022
Carson Portfolio Update: 18 November 2022
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I should have mentioned in the above post that only one of the 15 portfolio I track failed to outperform the S&P 500 over the past year. As I recall, that portfolio was the Pauling, a Dual Momentum portfolio.
Lowell
Lowell,
Is the Schrödinger portfolio called by that name by Schwab? I’m having a hard time finding it via search.
Thus far, I’m interested in following the Schrodinger, and the Carson, and Huygens. Is that enough for diversity? Or would you suggest a 4th? Which one?
TF
I am not sure, but they go under the ‘Intelligent Advisor’ portfolios (or the like).
Craig,
Correct. Schwab calls there computer managed portfolios, “Intelligent Portfolios” or something similar.
Of the 15 portfolios I’m currently tracking, the Schrodinger nearly always comes in among the top 1/3 of the group. Not at the top, but very strong to be sure.
Lowell
TF,
Schwab identifies portfolios by number. However, you can assign a name to a portfolio and I gave the Robo Advisor portfolio the name, Schrodinger. I’ve assigned names to the different portfolios using well known math and science figures of the past. Schwab refers to their Robo Advisor portfolios as Intelligent Portfolios as they are managed by a computer.
If I were to suggest a fourth, it would be the Copernicus. That is the portfolio where you select from one to four ETFs that focus strictly on U.S. Equities. Invest regularly so one is dollar cost averaging and never sell unless there is a dire emergency.
Lowell
Hi Lowell,
Just read your Seeking Alpha article, and have been following your blog for some time.
Your exit rules are very similar to what Chuck Lebeau described many years ago in a Tradestation seminar (I can send it to you if you are interested). He suggested a trailing stop based upon an ATR-based Chandelier exit. Over time, he would tighten the number of ATRs, from 3-4 early on to about 1-2 late in the game. This could be programmable for you as you have distinct criteria for your trailing stop. He also introduced a ‘Yo-Yo Stop’ which protected against a large move against your position (i.e., event-driven, like the pandemic, Ukraine war, …). If you have the time, you might want to look into those methods. If you can program in Visual Basic, you can incorporate the rules right into your spreadsheets (of course, heaven help you in this 🙂 ),.
Craig,
First, your comment was delayed as first messages must receive my approval. After this your comments should show up immediately.
Thank you for the information related to Chuck Lebeau. As for tightening sell orders, if a particular sector moves into the 80s bullish zone I tighten the TSLO to 2%. Should the sector rise into the 90s, I tighten further to 1%.
I am not a Visual Basic programmer so I just track the BPI data on a regular basis. This is not difficult now that I have four Sector BPI portfolios running.
I will be checking on on three of the four before the coming weekend.
Thank you for your comment and keep them coming. We appreciate it as I do from all who contribute to this blog. We are in this together to learn from each other.
Lowell
Thanks for activating my commenting so quickly.
I have sent you the Lebeau webinars/presentations. They are almost 20 years old now, but such information never becomes obsolete.
Enjoy. If anyone else would like copies, let me know.
Craig,
Thank you. I received the three files.
Lowell
Craig,
I would like to take a look at the Chuck Lebeau presentations if you would be kind enough to send me the links at d.faulkner7@yahoo.ca. As you might be aware I am not a big fan of stop-loss orders (back-tests, generally, show that they hurt performance) – but would like to be if someone can provide evidence of efficacy 🙂
David
Since this post went up many months ago portfolio evolution has taken place here at ITA. There are now four basic models in use.
Examples are found by following the Schrodinger, Copernicus, (Pauling and Huygens), and all the rest.
Lowell