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Lowell Herr  

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  • Who Will Manage The Family Portfolio When I Die? [View article]
    Critical,

    "To discard the only viable option here IMHO of a trusted, paid advisor as being too expensive (0.5-1.5% for fund management fees isn't that much, don't know what paid advisors of firms would cost), isn't realistic in my view."

    Feeding the Fee Machine costs more than most investors realize. I could not disagree with you more on the point of paying out fees. Using conservative assumptions, over a 30-year period, a 1% of assets annual fee will cost the investor a third of future real investment returns. That is huge.

    One is much better off to set up a "Swensen Portfolio" (http://seekingalpha.co...) and teach the disinterested spouse how to rebalance.

    Lowell
    Dec 1, 2014. 08:01 AM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Marc,

    No, I have not performed back-tests using different intervals. Much too time consuming. When this model was initially set up, it was designed to be robust, but not tweaked in an effort to fit the data. Therefore, "curve fitting" was ruled out as historical data will differ from future data.

    The 10 ETFs (plus SHY) were selected as they provide global diversification and have low correlations. Low defined as <0.80.

    Lowell
    http://itawealth.com
    Nov 26, 2014. 09:13 AM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    91656,

    I think this article is exactly what you are looking for. Check it out.

    http://bit.ly/1yNj6sD

    Lowell
    http://itawealth.com
    Nov 25, 2014. 10:19 PM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Don,

    High volatility is considered bad. The 20% allocated to volatility is a way to find ETFs (or other securities) that have low volatility.

    Lowell
    http://itawealth.com
    Nov 25, 2014. 10:11 PM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Spangler,

    What you say above is what I observe in my portfolio tracking. When the market begins to sag, the portfolios improve with respect to the benchmarks. However, when the market takes off, portfolio returns lag the benchmarks.

    While I am not wishing for a bear market, neither do I dread a correction as I want to see how the momentum model works with out-of-sample data.

    Lowell
    Nov 25, 2014. 12:18 PM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Stephen,

    Return issues are related to the long (12-month) look-back period. I use a ranking combination that uses the model discussed in the article.

    I'm testing this approach going forward as that is the real proof as to whether the model works. In addition, I have three passively managed portfolios I'm tracking as a relative check on portfolio performance.

    Lowell
    Nov 25, 2014. 12:13 PM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Tmow,

    Another variation is to hold ETFs that continue to outperform SHY, but may not be in the top two performing securities. This will reduce portfolio churning and has a greater chance of including VTI, a well diversified ETF as it covers the entire U.S. Equities market.

    Lowell
    Nov 25, 2014. 07:54 AM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Spangler,

    Good point as there is the possibility, in the above portfolio, of ending up with all investments concentrated in commodities (DBC) and gold (GLD). While this is unlikely, it is still a possibility. I'm not sure how comfortable I would be if that is what the model recommended. It comes down to - What confidence do I have in the model?

    An alternative is to increase the number of possible holdings from two to something higher, an application I use for larger portfolios. Back-testing shows the returns are lower, as you suggest, when the number of holdings are increased.

    Lowell
    http://itawealth.com
    Nov 25, 2014. 06:24 AM | 1 Like Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    Don,

    If you click on the first table you will see the period is 63 days and it is a semi-variance rather than a mean-variance calculation. Reasons for these choices are available on my blog, but one needs to dig to find them.

    The spreadsheet has the flexibility to vary the number of days and to use a mean or standard deviation calculation.

    Lowell
    Nov 24, 2014. 10:13 PM | Likes Like |Link to Comment
  • Modifying The Dual Momentum Strategy [View article]
    106232,

    Yes, ranking software is available. Contact me for more information. The data is downloaded automatically from Yahoo Finance.

    Lowell
    http://itawealth.com
    Nov 24, 2014. 05:39 PM | Likes Like |Link to Comment
  • Who Will Manage The Family Portfolio When I Die? [View article]
    Privately,

    Thank you for the thoughtful response. I agree with you as to placing critical information in a safety deposit box. A safe or secure place is preferred.

    As for active vs. passive management, I already made that move years ago as I use either a passive management style or semi-active approach. In other words, the portfolios could remain dormant for many months if not years.

    Lowell
    Nov 24, 2014. 08:34 AM | Likes Like |Link to Comment
  • Who Will Manage The Family Portfolio When I Die? [View article]
    57,

    I like your plan. It shows advanced planning. One only hopes the investment fees are low.

    Lowell
    Nov 22, 2014. 01:59 PM | 1 Like Like |Link to Comment
  • Who Will Manage The Family Portfolio When I Die? [View article]
    RF,

    Your remarks brought a laugh from me. I'm still chuckling.

    Lowell
    Nov 22, 2014. 10:17 AM | 2 Likes Like |Link to Comment
  • Who Will Manage The Family Portfolio When I Die? [View article]
    SD,

    A very useful article and not unlike what I am doing with a number of portfolios I track on my blog. Reducing risk by using SHY as a "circuit breaker" ETF is key to holding the draw-down percentage to a minimum.

    Lowell
    Nov 22, 2014. 08:18 AM | Likes Like |Link to Comment
  • Who Will Manage The Family Portfolio When I Die? [View article]
    Jim,

    Is it "Main Street Stock Investor?"

    Lowell
    Nov 22, 2014. 07:58 AM | Likes Like |Link to Comment
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