ITA Wealth Management

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