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  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 2 [View article]
    George,

    A spreadsheet for doing what you ask is available but I don't want to advertise on this site. Contact me if interested.

    Lowell
    Sep 22, 2013. 06:33 AM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    Jason,

    I don't think I covered that point in the article. If there are fewer than four ETFs performing better than SHY, then invest no more than 25% in any one ETF. Example: If there are only three ETFs performing better than SHY then invest no more than 25% in each of those three and the last 25% in SHY.

    When I am using the optimizer with SHY as the cutoff, I let the optimizer dictate the number of shares. When a portfolio comes up for review on my blog I walk readers through those judgment decisions.

    Lowell
    Sep 21, 2013. 03:47 PM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    Alex,

    Regarding ETFs with negative momentum, here is what I have been doing with portfolios where I use the "Dynamics" plus SHY mode. This only applies to ETFs that are outperforming SHY.
    1. If the optimizer calls for additional shares and momentum is plus, I buy.
    2. If the optimizer calls for shares and momentum is negative I do nothing.
    3. If the optimizer calls for fewer shares and the momentum is positive I do nothing.
    4. If the optimizer calls for fewer shares and the momentum is negative I sell.

    Lowell
    Sep 21, 2013. 02:21 PM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 2 [View article]
    ElGordo,

    Thank you for the kind words. I've seriously thought about writing a book, but for now I concentrate my writing on my blog.

    Lowell
    http://itawealth.com
    Sep 21, 2013. 02:14 PM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    The momentum calculations (both absolute and relative) are explained on my blog. The explanation, particularly relative momentum, it too complex to go into here.

    The Ranking SS is available to Platinum members only. The optimizer software needs to be purchased from the individual who wrote the program.

    Lowell
    http://itawealth.com
    http://bit.ly/rfwO89
    Sep 21, 2013. 02:01 PM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 2 [View article]
    Extremebanker,

    It sounds like you are doing something very similar to what I lay out these two articles.

    Built into the Rankings SS is a 195-Day EMA as well as two other EMAs. As mentioned in the article, volatiltiy is also taken into consideration.

    Right now I am testing momentum models and the results are positive. Sounds like that is your experience as well.

    Lowell
    Sep 20, 2013. 03:53 PM | Likes Like |Link to Comment
  • If I Were Starting A New Portfolio Today [View article]
    Jon,

    You might find my blog of interest.
    Original Site: http://bit.ly/rfwO89
    New Site: http://itawealth.com
    Sep 11, 2013. 11:33 AM | Likes Like |Link to Comment
  • If I Were Starting A New Portfolio Today [View article]
    Jon1977,

    If taxes were not to change (of course this will not happen) then it makes no difference whether one uses a Roth IRA or traditional IRA. The probability is that taxes will rise before you retire so I would go with the Roth IRA.

    As to used an index fund or index ETF, I prefer the ETF route as one can set limit orders. I find this a benefit over use an index fund.

    Lowell
    Sep 10, 2013. 11:32 AM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    If taxes are an issue, then a model such as this one is better used within a tax deferred account. I tend to not let taxes dictate investment decisions unless it seems prudent to sell to capture some major tax losses as was the case in 2008. However, this model is designed to reduce risk, particularly to the downside.

    Lowell
    Sep 10, 2013. 06:35 AM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    I review the portfolios I track every 33 days. I am finding I buy and sell approximately four to six ETFs each review period. For this reason, I stick almost exclusively with commission free ETFs.

    Those buy and sell transactions are generally "fine tweakings" rather than selling out of an ETF and buying something completely new.

    Lowell
    Sep 10, 2013. 06:31 AM | Likes Like |Link to Comment
  • If I Were Starting A New Portfolio Today [View article]
    Jon1977,

    My first purchase would be VTI, an ETF that covers the entire U.S. Equities market. That would be my very first purchase. Be sure to set up an account with a discount broker who provides commission free ETFs.

    Lowell
    http://itawealth.com
    Sep 10, 2013. 06:26 AM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    Varan,

    Yes, we tested TLT, but due to its great run during the test period it looked more like an anomaly and we were not interested in curve fitting to improve returns. Further, we wanted a cutoff ETF that had a low volatility and SHY fit the bill. TLT is quite volatile as you can see from the screen shot.

    The choice of ETFs was made before any tests were run, much as one would set up a portfolio without knowing past results.

    Lowell
    Sep 6, 2013. 09:21 PM | Likes Like |Link to Comment
  • Momentum Model Increases Return While Reducing Portfolio Risk - Part 1 [View article]
    Volatility is the standard deviation or price movement of the ETF over a specified time frame. Inside the spreadsheet one can select a time frame. In the example I used a 10-Day period.

    Lowell
    Sep 6, 2013. 11:02 AM | Likes Like |Link to Comment
  • Faber-Richardson Quantitative System Works: A Modified Approach. [View article]
    Brian,

    There is none. The owner of that portfolio requested that name. Also, I think there is one portfolio named after a president.

    Sorry to break the trend. (g)

    Lowell
    Aug 21, 2013. 09:16 AM | Likes Like |Link to Comment
  • Faber-Richardson Quantitative System Works: A Modified Approach. [View article]
    Will_7000,

    No connection. I name the portfolios I track after physicists and HedgeHunter ask me to give a name to this sample portfolio.

    Lowell
    Aug 9, 2013. 09:36 AM | Likes Like |Link to Comment
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