cheesey mike

Building an All-ETF Ivy Endowment Portfolio

If you take these asset allocation recos' and then use a trailing stop loss or trailing hedge strategy for each position, then you would have done much better last year.

Do ETNs Belong in Your Portfolio?

I have been dying to have someone explain the tax treatment difference between a commodities ETF and a comodities ETN, which might have some bearing on this issue. Last year, I owned DBC, and I received a 2007 K-1 limited partnership form as a result (adding a degree of complexity to my tax return). In addition to the interest income I received, I had to pay taxes on the unrealized gain in value of the position during the year as normal income even though I did not sell the position. This is a very tax inefficient investment (given the incredible run-up, I'm not complaining), and I would be very curious to know if an ETN that represents a similar commodity basket would be equally tax inefficient. If there is some tax benefit (i.e. you don't have to pay taxes on the gain until you sell the position), that would be a big plus for ETNs. However, I did some rudimentary comparisons of performance of various commodity ETFs and ETN's and found that the ETF's appeared to have significatly better performance histories.

Ironically, I have owned GLD position for several years, and never had to pay a dime in taxes for holding that position.

Money Magazine ETF Recommendations: Keeping It Simple May Be Stupid

As a new ETF investor (who has moved away from managed wrap accounts), I greatly appreciate these articles that talk about allocation strategies. I believe the CNNMoney portfolio is too simple though, and perhaps even Gary's Gorden's as well, but its a great starter portfolio and would have weathered the recent correctly well. I would consider adding intl real estate (though not right now) and emerging market debt. Also, I am not sure about VEU/DLS as a complete proxy for international equities. I have been using EFA/EEM/VWO/EEB but plan to move toward single country or regionals as I get more comfortable with self management. These tweaks start to cross the line from simple/lazy, but the bueaty of ETF's is one can pick their own level of involvement and complexity, or evolve there over time, and there is more low-cost diversification here than many "old-school" portfolios.