Charles Allmon, one of the well known newsletter writers of the last century, retires at age 87. Mark Hulbert, a tracker of investment newsletters since the late 1970s had the following to say about Mr. Allmon.
“What is the final score on the 28-plus years that the Hulbert Financial Digest has been tracking Growth Stock Outlook? From mid-1980 through the end of October, according to the HFD, Allmon’s model portfolio produced a gain of 8.9% annualized, in contrast to a 10.6% annualized total-return for the Dow Jones Wilshire 5000 index.”
“Though lagging a buy-and-hold by 1.7 percentage points per year may strike you as underwhelming, note carefully that in the process of producing its return, Allmon’s portfolio was 55% less risky than the stock market itself. On a risk-adjusted basis, Allmon is well ahead of a buy-and-hold.”
With our emphasis on the return/risk ratio, Allmon’s record is quite commendable.
Lowell Herr
Photograph: Otto
Back on March 17th of this year, I published a Portfolio for Dummies. At that time I did not have access to the Quantext Portfolio Planning (QPP) software so I was unable to examine the projected return, portfolio risk, and portfolio diversification. With QPP in hand, I decided to analyze the sample portfolio of eight months ago and here is the “movie” of that analysis.
The next move is to find investments, be they individual stocks or other ETFs, that will reduce the standard deviation while maintaining an acceptable return.
Lowell Herr
Photograph: Victoria Hotel – Amsterdam, Holland
Premium subscription available for $6.99 per month.
In this movie you will pick up the projected returns for the different ETFs mentioned in the prior post, the average projected annual return, and the standard deviation for the portfolio.
One will soon see that this is a conservative portfolio and therefore not the best choice under the current market conditions, unless you think the market will sink even further. If you are one that thinks we will pull out of this financial funk before many months pass, then watch for another scenario over on the Premium Content side of the blog.
Lowell
Photograph: Another image to get one into the spirit of Thanksgiving.
Premium subscription available for $6.99 per month.
