I was looking for a podcast on staying asleep since I wake up about 4am every day and found one by Tim Ferriss. I generally do not listen to The Tim Ferris Show podcasts since most are not on investing and last 2+ hours. His podcast from Oct 16 called “5 Tools I Use For Faster And Better Sleep” had a very interesting sponsor. wealthFront.com/tim offers automatic wealth management at only a 0.25% management fee. They have an evaluation quiz to determine their recommended investments for your age, risk adversion, income, and investment assets. The portfolio they suggested for me are 6 or 7 ETFs. As I decrease my risk tolerance I get more municipal bond ETFs and the less stock ETFs, expecially the US, foreign, and emerging market stocks. They offer slightly different suggestions for IRAs. They use Modern Portfolio Theory (MPT) developed by Markowitz and Sharpe who shared the Nobel Prize in Economics in 1990. A lot has been written about MPT – both suggesting it is great and suggesting it is rotten.
I do suggest you not place too much value on winning the Nobel Prize in Economics. Scholes and Metron won it in 1997. They, along with others, started Long-Term Capital Managment LP (LTCM) in 1993 which made 21% the first year, 43% the second year, 41% the third year but by 1998 had to be bailed out by the Federal Reserve Board and several banks and was liquidated in 2000. The partners once had 1.9b invested of their own money invested in LTCM and ended up with zero.
IBD TBP’s Market Pulse is “Confirmed Uptrend” as of 12/29/15 – If it is still the same in a week I will buy something.
My personal thought is with 43% of the Nasdaq stocks above their 50 day average it is not too bad, but not good.
My current investments:
IRA#1 and IRA#2
SRetailing has a price of 105.21, a sell price of 103.16, a rank of 01, and is a Hold. (ETF – XLY)
IRA#2
SSoftware&ComputerServices has a price of 121.41, a sell price 118.38, a rank of 03, and is a Hold. (ETF – MTK)
SConsumerDiscretionary has a price of 34.17, a sell price of 33.88, a rank of 29, and is a Hold. (ETF – FDIS)
STechnology has a price of 118.09, a sell price of 115.61, a rank of 10, and is a Hold. (ETF – IGM)
My funds lost between 0.11% to 0.96%. Not very wonderful.
My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None
My portfolio market exposure after this weekend’s changes:
IRA #1 – 100% invested
IRA #2 – 80% invested