Fred Swartz

Stress Testing Your Portfolio

Interesting idea for evaluating buy and hold portfolios, but assumptions about return, volatility, and correlations will change these results dramatically. And we know how well 2006's assumptions apply today.

It would be informative to see what results for 12/2006, 12/2007, and 12/2008 would have been.

Why We Over-Weight Emerging Markets

I have no argument with the emerging markets hypothesis, but perhaps you are reading too much into the simple moving averages. The 200 day SMA of the DIA is still plummeting because the data points that are being dropped 200 days ago are relatively high values from before the Oct 2008 drop, while the recent data points being added are lower. As soon as Sep 08 passes out of the average it will rise dramatically. Equal weighting of old data points in simple moving averages can have very deceptive effects.

Using the 200-day Exponential Moving Average (also from stockcharts.com) gives a different impression, and in the opinion of many, a more reasonable representation of trends.

If you make arguments about the recent behavior of an SMA, as you did, you should at least point out that these changes are due as much to old data as new data.

Not that this has much to do with the main point of your article :-)

How the Stock Market Is Like a Dog on a Leash

What's wrong with just showing the usual superimposed moving average, where we can see the distance between the price and the average? Your display removes the useful information about price movement. Bollinger bands give even more info. Sorry, but I see only disadvantages to this kind of display.

Achieving Outperformance in a Low Return World

Thanks for mentioning "Mission Impossible", but it might also be interesting to tell us what you thought about it (good, bad, ...).

Asset Allocation: Investing by the Numbers

Ahh, old school asset allocation without commodities.

David Swensen On Keeping It Simple

This is a typical "don't dream of doing what we're doing" article by professional investors. It contains the usual mix of "you don't know what you're doing" along with contradictory advice of the "stick to your long-term goals", be "disciplined", and "rebalance ever quarter". Having just said that mortals are unable to do any of these things intelligently without advisers, it seems strange to demand this kind of behavior. And remember "don't have fun"!