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Showing posts from February, 2016

ETF Snapshot: MGC

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ETF Name: Vanguard Mega Cap ETF
Asset Class: Domestic Stock - Large Blend
Index Tracked: CRSP US Mega Cap Index
Expense Ratio: .09%
Assets Under Management: $1.1 billion
Number of Holdings: 293
Price/Earnings Ratio: 19.2
Price/Book Ratio: 2.7
SEC Yield: 2.26%


Trading Wal-Mart For A Couple of Solid ETFs

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In a recent article, I featured the concept of being alert to various forms of "currency" when structuring and rebalancing your portfolio.

I would like to share with you a quick example of how I did just that in my own portfolio this morning.

Last October, I added Wal-Mart (WMT) to my personal portfolio. I wrote about the decision in this article for Seeking Alpha. As it turns out, this proved to be a timely purchase. While the markets in general have been extremely volatile to open 2016, WMT has risen a solid 10% from my average purchase price of ~$60.00.

However, several recent articles from Seeking Alpha authors whom I respect have questioned WMT's valuation at these prices. Here is one example of such an article. I decided that I agreed with their view.

ETF Snapshot: SCHO

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ETF Name: Schwab Short-Term U.S. Treasury ETF
Asset Class: Short Government Bond
Index Tracked: Barclays U.S. Treasury 1-3 Yr TR USD
Expense Ratio: .08%
Assets Under Management: $1.2 billion
Number of Holdings: 68
Average Duration: 1.86 Years
SEC Yield: .36%


ETF Snapshot: SCHF

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ETF Name: Schwab International Equity ETF
Asset Class: Foreign Large Blend
Index Tracked: FTSE Developed ex-US Index
Expense Ratio: .08%
Assets Under Management: $4.7 billion
Number of Holdings: 1,216
Price/Earnings Ratio: 15.06
Price/Book Ratio: 1.62
SEC Yield: 2.37%


ETF Snapshot: SPY

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ETF Name: SPDR S&P 500 ETF
Asset Class: Domestic Stock - Large Cap
Index Tracked: S&P 500 Index
Expense Ratio: .0945%
Assets Under Management: $169.62 billion
Number of Holdings: 504
Price/Earnings Ratio: 17.32
Price/Book Ratio: 2.44
SEC Yield: 2.22%


ETF Snapshot: SCHA

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ETF Name: Schwab U.S. Small-Cap ETF
Asset Class: Domestic Stock - Small Blend
Index Tracked: Dow Jones U.S. Small Cap Total Stock Market Index
Expense Ratio: .08%
Assets Under Management: $2.6 billion
Number of Holdings: 1,757
Price/Earnings Ratio: 19.17
Price/Book Ratio: 1.93
SEC Yield: 1.96%


ETF Snapshot: BNDS

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ETF Name: SPDR Barclays Aggregate Bond ETF
Asset Class: Intermediate-Term Bond
Index Tracked: Barclays U.S. Aggregate Bond Index
Expense Ratio: .08%
Assets Under Management: $30.6 billion
Number of Holdings: 2,682
Average Duration: 5.40 Years
Yield to Maturity: 2.27%


ETF Snapshot: AGG

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ETF Name: iShares Core U.S. Aggregate Bond ETF
Asset Class: Intermediate-Term Bond
Index Tracked: Barclays US Aggregate Bond Index
Expense Ratio: .08%
Assets Under Management: $30.6 billion
Number of Holdings: 4,983
Average Duration: 5.12 Years
Yield to Maturity: 2.45%


Rebalancing The ETF Monkey Vanguard Core Portfolio

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In connection with the philosophy explained in this article, I executed a series of rebalancing transactions in The ETF Monkey Vanguard Core Portfolio as of pricing available at approximately 9:30 a.m. Pacific Time on February 11, 2016.

The Rebalancing Transactions Here is a graphic of the Excel worksheet I used to analyze the rationale for rebalancing, calculate and track the necessary transactions, as well as display the "before and after" status of the portfolio. Please note that you can click on the picture to see an enlarged view.

As can be seen in the "Before Rebalancing" section, due to the extremely sharp decline in both domestic and foreign stocks during this first part of 2016, the weightings of these asset classes had fallen significantly below our targets; almost 2% in the case of foreign stocks. At the same time, bonds were 1.3% above their target weight, and we also had $580.31 of cash from dividends received that could be put to use.

Are You A Trader Or An Investor? - And Finding Your Comfortable Risk Level

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The year 2016 has opened with great volatility in the markets. This, combined with the constant (and often conflicting) headlines and sound bites that bombard us through the media can cause an investor to become fearful, lose their nerve. and even panic. This leads to ill-conceived trading; buying and selling simply to do something. Here's how Warren Buffett put it on one occasion:
Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations and accompanying commentators delivering an implied message of “Don’t just sit there, do something.” For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.  In contrast, if one is an investor, some measure of volatility inevitably comes with this. The key is to find your own comfort level with volatility and risk, and then behave in a disciplined manner.

For a quick graphic representation of this,…

ETF Snapshot: SCHM

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ETF Name: Schwab U.S. Mid-Cap ETF
Asset Class: Domestic Stock - Mid Cap Blend
Index Tracked: Dow Jones U.S. Mid Cap Total Stock Market Index
Expense Ratio: .07%
Assets Under Management: $1.81 billion
Number of Holdings: 507
Price/Earnings Ratio: 19.18
Price/Book Ratio: 2.24
SEC Yield: 1.90%


ETF Snapshot: SCHH

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ETF Name: Schwab U.S. REIT ETF
Asset Class: Real Estate
Index Tracked: Dow Jones U.S. Select REIT Index
Expense Ratio: .07%
Assets Under Management: $1.77 billion
Number of Holdings: 97
Price/Earnings Ratio: 37.60
Price/Book Ratio: 2.47
Distribution Yield: 2.58%


Thoughts On Portfolio Rebalancing and "Currency"

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Author's Note: If you find my work valuable, I would deeply appreciate your taking a minute to follow me on Twitter, Google +, and/or Facebook and/or sharing a link to this article on your social media accounts.

Back in November, 2015, I wrote a fairly comprehensive article for Seeking Alpha on the subject of portfolio rebalancing. I was honored with the piece being selected as an Editor's Pick.

In this brief piece, I want to touch on a somewhat related question. What is "currency"?

In general, when someone says "currency," likely the first thing that comes to mind is "cash." After all, cash is the legal tender of the country in which we live. With cash, we can buy assets.

However, don't forget the perspective that the assets in our portfolio are also a form of currency. To see what I mean, take a quick look at the two screenshots I share below. The first picture features my personal asset allocation as of December 31, 2015.


Words Of The Sage: Warren Buffett On Investing

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For this series, "Words of the Sage," it is my goal to share selected investment thoughts and advice from some of the foremost investors of our times. I couldn't think of a better person to start with than Warren Buffett.
Warren Buffett - A Brief Biography Warren Buffett was born on August 30, 1930, in Omaha, Nebraska. Readers may recognize that time frame as falling in the midst of the Great Depression. Nebraska did not escape the effects of this difficult period, and Buffett early on learned the value of the dollar. While still a boy, Buffett sold soft drinks and had a paper route. As one example of his early financial prowess, at the tender age of 15 he managed to amass $2,000 and use it to buy a 40-acre farm, the income from which helped him to pay his way through university.



Following his graduation from university, Buffett worked with his idol and mentor, Benjamin Graham, even moving to live in New York for a time. However, in 1956 he returned to Omaha, bought a h…

ETF Snapshot: SCHP

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ETF Name: Schwab U.S. TIPS ETF
Asset Class: Inflation-Protected Bond
Index Tracked: Barclays U.S. Treasury Inflation Protected Securities (TIPS) Index (Series-L)
Expense Ratio: .07%
Assets Under Management: $862.6 million
Number of Holdings: 37
Average Duration: 7.68 Years
SEC Yield: 1.79%


ETF Snapshot: IUSG

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ETF Name: iShares Core U.S. Growth ETF
Asset Class: Domestic Stock
Index Tracked: Russell 3000 Growth Index
Expense Ratio: .07%
Assets Under Management: $891.4 million
Number of Holdings: 1,834
Price/Earnings Ratio: 21.00
Price/Book Ratio: 5.18
SEC Yield: 1.42%