![]() |
Vanguard ETF: | ![]() ![]() ![]() ![]() |
7.4%* |
![]() |
Diversified Core: | ![]() ![]() ![]() |
8.1%* |
![]() |
Six Core Asset ETFs: | ![]() ![]() ![]() |
7.3%* |
Articles on COMP
- BBC’s Eurozone Debt Web
11/18/2011
The arrows point from the debtor to the creditor and are proportional to the money owed as of the end of June 2011.
Visit the original page for the interactive charts
- 401K Investments: 6 Myths Debunked
11/17/2011
Brian Graff, Executive Director for ASPPA (American Society of Pension Professional and Actuaries) debunked 6 myths regarding to 401K retirement plans:
Myth 1 – tax deductions for employer contributions and pre-tax deferrals by employees in 401(k) plans are lost revenue for the government. Short term government revenue can be boosted by reducing the tax deductions with the expense of losing long term revenue while creating more liabilities for government.
Myth 2 – less than 50% of American workers are covered by retirement plans. In March 2011 the results of the National Compensation Survey conducted by the Bureau of Labor showed that 73% of full time American workers have access to a retirement plan and of that amount 80% of them use their plans.
Myth 3 – only the wealthy benefit from retirement plans. Not true, 74% of participants in defined contribution retirement plans (such as 401(k) plans) have family incomes below $100,000 a year. Thirty eight percent of participants earn less than $50,000 a year.
Myth 4 – 401(k) plans are inadequate. However, tabulations based on the EBRI/ICI 401(k) Accumulation Projection model show the replacement ratio for 401(k) plans and Social Security combined is over 100% for the lowest income quartile, and well over 80% other income quartiles.
Myth 5 – cuts to limits on retirement plans will only impact the wealthy.
Myth 6 – workers will save for retirement without a workplace retirement plan.
Read the original article.
Symbols: 401K Investments, Retirement, SPX, COMP
- 3 Lessons from the Demise of Legg Mason's Bill Miller
11/17/2011
Bill Miller to Step Down From Legg Mason Value Trust, reported by AdvisorOne.com. Since the great financial crisis in 2008, there have been numerous high profile managers' failures including Fairholme's Bruce Berkowitz (FAIRX). While we can put blame on these individuals, what one should always remember is that all humans are subject to failures, regardless how great they are. By the way, this is also applicable to ourselves and various great committees (recently, Morningstar started to release its new 'forward looking' rating system that is decided by committees, we'll have more on this later). So what to do with our retirement investments such as 401K, IRA accounts? How do we escape from being trapped in such funds? 3 lessons can be drawn from this:
- Diversification: you need diversification at your overall account level, at your portfolio level and at your security level. Diversified funds are better than individual stocks, especially if you are only dealing with a handful of them. At the portfolio or account level, proper asset allocation determines majority of your returns and risk.
- Fundamentals: yes, we still believe fundamentals such as managers' track record, investment strategies, fund expenses, etc. These will serve you the first line of defense (and offense). So information provided by firms such as Morningstar.com is still useful.
- Technical or stop loss: on the other hand, we do believe that one need to have a ultimate line of defense: when a fund is not doing well for an extended period based on a systematic and well defined set of rules, you have to liquidate it. The permanent capital loss is just too great to hope for a recovery or rely on superhuman acts.
The last point is the most contentious and sometimes is against our super human or well educated committee members' consensus. Recognizing that adopting this will result in under performance in a super bull market or for an (extended) period of under performance of a good fund. But that is again an insurance one has to pay to avoid severe damages by such super humans.Just as a comparison, the David Swensen Six ETF Asset Individual Investor Plan consists of only six broad base ETFs and diversified asset allocation portfolios have outperformed both S&P index and other once great funds by big margins:Portfolio Performance Comparison (as of 11/16/2011)
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe David Swensen Six ETF Asset Individual Investor Plan Tactical Asset Allocation Moderate 12% 72% 11% 82% 10% 68% David Swensen Six ETF Asset Individual Investor Plan Strategic Asset Allocation Moderate 5% 26% 18% 90% 6% 27% FAIRX -22% -74% 10% 36% 0% -3% SPY 6% 4% 15% 23% -1% -9% LMVTX -1% -6% 15% 48% -10% -34% More detailed comparison.
Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols: SPX, COMP, ETFs, Headline, Mutual-Funds Tags: EEM, EFA, FAIRX, IYR, LMVTX, SPY, TIP, TLT, VWO
- Investment Management: Morgan Stanley Smith Barney Is Now on Risk Off Mode
11/15/2011
Morgan Stanley Smith Barney published its latest November viewpoints on portfolio strategies. It stated that the odds of a recession in the U.S. and beyond are “uncomfortably high.” Here are its tactical changes for portfolios:
The global cash represents dollars and other currencies. This itself should be treated as an asset class that needs careful management.
Compared with MyPlanIQ's Tactical Asset Allocation(TAA), we are cautious and about 1/3 to 1/2 of full risk asset exposure. Some of our plans reduced risk asset exposures in September, helping to even preserve some gains from risk assets.
See Six Core Asset ETFs that consists of six major asset classes US Stocks (SPY, VTI), International Stocks (EFA, VEU), Emerging Market Stocks (EEM, VWO), REITs (IYR, VNQ), Commodities (DBC, GSG) and Total US Bonds (AGG, BND).
Portfolio Performance Comparison (as of 11/14/2011)
Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Six Core Asset ETFs Strategic Asset Allocation Moderate 3% 12% 13% 73% 5% 25% Six Core Asset ETFs Tactical Asset Allocation Moderate -0% -15% 8% 65% 9% 67% SPY 6% 4% 13% 23% -0% -9% VBINX 6% 14% 13% 46% 3% 10% More details here.
Symbols: SPX, COMP, SPY, VTI, EFA, EEM, VWO, VNQ, IYR, DBC, AGG, Investment Management, Asset Allocation
- Retirement Investments: Compared with Hedge Fund Performance
11/08/2011
The following is the newest October hot shot hedge fund performance data:
More specifically,
Strategies/Portfolios YTD (as of 10/31/2011) Fund of Funds - Diversifed -4.84% Diversified Macro -1.42% Global Macro -2.15% Six Core Asset ETF Strategic Asset Allocation Moderate 0.69% Six Core Asset ETF Tactical Asset Allocation Moderate -2.56% Permanent Portfolio Global trategic Asset Allocation Moderate 1% Permanent Portfolio Global Tactical Asset Allocation Moderate 2.13% Our Tactical Asset Allocation(TAA) is similar to Global macro hedge fund strategy. We can see that both Strategic Asset Allocation and Tactical Asset Allocation model portfolios are compared favorably with the hedge fund averages.
For more information, see Six Core Asset ETFs plan that has ONLY 6 broadbase ETFs (Vanguard low cost ETFs VTI, VEU, VNQ, VWO, BND and one Poweshares DB Commodities ETF DBC).
Permanent Global Portfolio ETF Plan uses Gold (GLD), silver (SLV) and other ETFs to form a diversified hedging portfolio.
Symbols: SPX, COMP, VTI, VEU, VNQ, VWO, BND, DBC, GLD, SLV, TLT, IYR, Retirement Investments, Hedge Funds, Asset Allocation
- Is My House an Investment?
11/07/2011
- The Peril of Underfunded Public Pensions
11/07/2011
- Balanced Portfolios Delivered Better Returns and Lower Risk
10/18/2011
- Strategic and Tactical Allocation for Retirement Investments
10/17/2011
- Don’t Fumble Your Retirement Planning
10/17/2011
- Ameriprise Employees Filed A Suit Over Expensive 401K Plan Fund Choices
10/13/2011
- 401K Investments: Alcoa Savings Plan Review
10/11/2011
- Retirement Investments: Right Expectations at The Right Time
09/23/2011
- 401K Investments: Facebook 401K Plan Reviewed
09/08/2011
- Advisors Turning to Alternative Investments: What ETFs Can You Use?
08/30/2011
- 3 Ways to Manage Your Portfolios to Cope with World Wide Food Inflation
08/26/2011
- Why 'Buy and Hold' Strategy No Longer Works?
08/19/2011
- Military Retirement Replaced with 401k?
08/17/2011
- Does Timing Market Only Work for Pros?
08/12/2011
- 5 Steps to Take When Your Company's Pension Is Underfunded
08/09/2011