ITA Wealth Management

Until I learned of Quantext Portfolio Planner (QPP), I was under the assumption I had a well diversified portfolio if it included the “Big Six” asset classes plus a developed international ETF, emerging markets, REITs, and a bond or two.  In the following movie, take six minutes of your time to view the difference between a Basic Portfolio and a Basic-Plus Portfolio.  In the Basic-Plus Portfolio, an asset class is added, and in addition, individual stocks were selected from this weeks “Top Ten.”  The complete “Top Ten” list of stocks is available over on Premium Content.

It is so easy to be lulled into thinking one has a well diversified portfolio.  But how does one know the degree of diversification unless an analysis is performed on the investments that make up the portfolio.  Just as most investor do not have a clue as to how well their portfolio is performing with respect to a benchmark, even fewer investors know the risk they are taking with their portfolio.  Increased risk may be due to an under diversified portfolio.  The fault does not lie entirely with the investor as we are not provided with the proper tools to measure what we need to know.  Premium Content readers do have the added advantage of access to a spreadsheet that will both track portfolio performance and accurately measures that performance against a Total Stock Market Index.  QPP now offers an additional tool to make intelligent decisions in the portfolio construction process.  And we are in the business of informing intelligent investors how to go about building portfolios that have a high probability of outperforming the S&P 500 with comparable risk.

Once more we come back to the fundamentals of investing.

• Save as much as you can as early as you can.
• Develop an investment plan
  • What asset classes should be included in the portfolio?
  • What investment vehicles will be used to populate the asset classes?
• Does one dollar-cost average into the market or does one invest all immediately?
• What does rebalancing mean?
• What does research have to say about the importance of asset allocation?
• Can I manage a portfolio on my own or should I leave it to a professional?
• A technical indicators of any value?
• Where does Tactical Asset Allocation (TAA) enter into portfolio management?

Here at ITA Wealth Management, we seek to help individual investor plan, build, and manage their own portfolios.  Questions are always most welcome.

Lowell Herr

Photograph:  Shasta

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