How to Build and Manage a Portfolio

Step by Step instructions, as well as FAQ’s (Frequently Asked Questions) on building and managing your portfolio using our tools and approach.

Sticking to the Cautious Plan

Posted by on Jul 27, 2012 in Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

Hey everyone… I’ve been trying to take some time off this week, but have been watching the markets. I’m sticking to the cautious plan laid out over the last few weeks. We raised quite a bit of cash, then reinvested in bonds and real assets, keeping about 30% in cash. Today, we’re adding to the Facebook shares at a bargain price to get back to our 2% target. As the stock fluctuates up and down, we sell when it goes up and buy when it drops to keep the allocation at about 2% of the portfolio’s. In the long-term, I’m very comfortable ignoring the pundits. Let...

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This LIBOR Thing Bothers Me a Great Deal

Posted by on Jul 17, 2012 in Current Model Portfolio Allocations, Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

I’m on vacation this week, but I spent the morning watching Ben Bernanke’s testimony on TV because I wanted to hear what he says about the LIBOR (London Interbank Offered Rate) manipulation by Barclays Bank (and others), ongoing since 2008. This thing reminds me of the initial news in 2007 that a couple of hedge funds in Europe had closed because they didn’t know what their holdings were worth. That news was apparently ignored by the markets, but was the first overt indication of the coming financial armageddon. I don’t like what he said, and I don’t like the...

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Question from a PortfolioWisdom App Owner

Posted by on Jul 10, 2012 in Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

Below is a question from someone who is using the PortfolioWisdom App along with my answer. I hope everyone finds it informative and useful. Dale On Jul 10, 2012, at 10:09 AM, AC wrote: Dale, I have become a recent fan of your investing philosophy and have recently subscribed to your excellent mobile app.  I have experimented quite a bit with entering different profiles into the app.  I realize that your methodology for asset allocation is your proprietary secret sauce, but would love a little more insight into what metrics you use to dynamically adjust the allocations over time, if you are...

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The Futility of Prediction Investing

Posted by on Jun 29, 2012 in Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

If you had been asked to bet your portfolio on what would happen in the markets this last Monday, what would you have done? Listening to CNBC, Bloomberg, and everyone else on TV, most would have either bet the markets would collapse or just gone into cash to “wait it out”. Today, there is a new announcement in Europe and there is a huge rally in stocks. Bonds are down, but not overly so. Real assets are up even more than stocks, presumably because the financial engineering in Europe is perceived to devalue paper currencies, especially the Euro. If you had predicted a big rally,...

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Diversification is a Beautiful Thing

Posted by on Jun 15, 2012 in Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

Well, how about that?  I’m sitting here looking at the screen which shows our portfolios have gained over 1% since last Friday, when we went completely back into our portfolio models. Here’s the amazing part… the S&P500 is close to where it was a week ago, but just about all the other asset classes have gained. The biggest contributors? Non-US government bonds! … followed by some holdings in real assets. This development goes to show us at least three things: Prediction is a losing way to invest… we could never have predicted this even a week ago, Our...

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Returning to Full Investment in the Models

Posted by on Jun 8, 2012 in Dale's Market Comments, How to Build and Manage a Portfolio, Portfolio Wisdom Blogs | 0 comments

Well, we have had a very good run vs. the markets since mid-April, when I said that “something doesn’t feel right” and raised a great deal of cash. At the time, I said we would gradually move the cash back into the models, which we have been doing. Today, I am putting the last 15%-20% cash back into the models. I am  not making a prediction the markets will now rally… I really don’t know. As I said in an earlier post “Wake Up and Smell the Coffee” , the investment professionals (and successful individual investors, for that matter) are people who...

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