ITA Wealth Management

Why track so many different portfolios?  Will one not suffice?  The reason for creating, managing, and monitoring a variety of portfolios is quite simple.  A single portfolio may  easily turn out to be a lucky situation that happened to work for reasons outside the control of the money manager.  However, if one works with a wide variety of portfolios of differing size with various starting periods, and they continue to show positive results, there is a greater probability the method of portfolio construction is valid.

The numerous portfolios I track range in size from several thousand dollars to approximately one-half million.  I use this range of portfolios as they mirror many small investors across this country.  One does not need vast sums of money to use methods advocated on this blog.  Some of the portfolios have cash flowing in and out of them while others are static.  The initial investment is likely it so cash flow is minimal.  The portfolios were launched at different times so market conditions will impact them differently.  There is a high probability another portfolio will be launched this fall.

Here is a list of the portfolios I am tracking for various individuals and organizations.  On the Premium Content side of this blog, I provide detailed information, including spreadsheets, on the following.

• AA-Mosaic
• Mosaic2
• GLW
• Scrappy
• Passive Portfolio

On occasion I will go into detail on the “Passive Portfolio” as this is my longest running portfolio populated by ETFs and built around the concept of asset allocation.  I’ve only made this SS available on rare occasions. 

Other portfolios I report on, usually on the free side of the blog, are the following.  Ultimate details are confined to the Premium Content side.

• C & D
• AEM (I plan to report on this portfolio this week or early next week.)

In addition to these seven portfolios, I watch over several more but they are too small to provide adequate funds to employ asset allocation principles.  One should have a minimum of ten to twenty-five thousand to set up a respectable portfolio.  Anything smaller and one should move to “Portfolio for Dummies” where one buys two or three index funds for their portfolio.  You can look that reference up on this blog.

Lowell Herr

Photograph:  Sunset near Ocean City, Maryland

Access to Premium Content is available for $6.99 per month.

The C & D Portfolio has a history of approximately five years, so it is still a relatively young portfolio.  This portfolio was initially built around individual stocks, but those picks were not keeping pace with the broad stock market.   Given a green light, I was asked to rework the portfolio using the principles of asset allocation.  I’ve gradually been selling off stocks to where the portfolio now only holds Johnson & Johnson (JNJ) a very high quality stock, and one that is in one of the Mosaic portfolios.

Recently, the Internal Rate of Return (IRR) for the C & D Portfolio moved ahead of its VTSMX benchmark, 2.6% to 2.3%.  That is not a significant lead, but it is still better than reversing the numbers.  Over the history of the portfolio, the Information Ratio is negative and will likely remain that way for a long time.  When a portfolio digs a major hole, it is very difficult to climb out of it.

There are still several asset classes to populate in this portfolio and there is some available cash to make that happen.  This portfolio is just another example of how asset allocation can work to the long-term investors advantage.

Lowell Herr