Investment strategies and portfolios are tailored plans designed to meet financial goals through the careful selection and management of assets. The cornerstone of a successful investment portfolio is diversification, spreading investments across various asset classes like stocks, bonds, and real estate to mitigate risk. Asset allocation is another key strategy, determining the mix of assets based on an investor’s risk tolerance, goals, and investment horizon. Investors often choose between active investing, which seeks to outperform the market through strategic buying and selling, and passive investing, which aims for long-term growth by tracking market indices with lower transaction costs. Regular portfolio rebalancing ensures the investment mix remains aligned with the investor’s objectives, adjusting for market fluctuations and life changes. Tax-efficient investing strategies can also enhance returns by minimizing tax liabilities. Ultimately, a well-considered investment strategy and portfolio management approach can help individuals navigate market complexities and achieve financial growth over time.
In the book, “Reducing the Risk of Black Swans”, an educational treatise on how to avoid unexpected catastrophic losses, Larry Swedroe presents the Larry Swedroe Portfolio. If you want a way to maximize returns while minimizing risk, the investment approach…
Nassim Nicholas Taleb invented the word antifragile in his book with the same name when he was looking for the opposite of fragile. Antifragile is relevant for investors. What is antifragile investing? In this article, we look at how you…
Known as the Oracle of Omaha for his investment prowess, Warren Buffett is one of the most popular investors in the world. According to Bloomberg, Buffett has amassed a personal fortune in excess of $100 billion. Want to know about…
The Gone Fishin’ Portfolio by Alexander Green is a “lazy” index diversified portfolio that allocates assets across 4 asset classes: stocks, bonds, REITs and precious metals. These 4 asset classes are divided into 10 categories: U.S. Stocks, U.S. Small Cap…
Have you ever wondered what are the best performing stock markets in the world? Almost every country has a functional stock market, but not all countries’ stock markets have been performing the same. If your great-great-grandfather had invested $1 in…
The period from October to May (next year) has been the best period for US stocks since at least 1960. Practically all the gains have come during these seven months. But if we look at the different sectors of the…
Harry Markowitz won the Nobel Prize in 1990 for his work in showing mathematically how to reduce risk and create better returns by diversifying across regions and assets. Risk is measured in volatility, i.e. how your assets fluctuate in price….
Frank Armstrong is a financial advisor, author, and the founder of Investor Solutions, a registered investment advisory firm based in Miami, Florida. With over 30 years in the financial industry, Armstrong has written several books on personal finance and investing,…
The Core 4 Portfolio by Rick Ferri is a “lazy” index diversified investment portfolio that allocates assets across 3 asset classes: stocks, bonds, and REITs. These 3 asset classes are divided into 4 categories: U.S. stocks, international stocks, intermediate bonds,…
David Swensen was the President and Chief Investment Officer of Yale University endowment from the mid-1980s until his death in May 2021. Swensen, along with Dean Takahashi, invented The Yale Model. Let’s take a look at the David Swensen Portfolio…
In a 2013 letter to Berkshire Hathaway investors, Buffett noted that, upon his passing, the trustee of his wife’s inheritance was instructed to put 90% of her money into a very low-fee stock index fund and 10% into short-term government…
No matter how good strategies you have, they are most likely worthless if you can’t execute them properly. What looks like a piece of cake on paper, is completely different in the real world when you are risking your own…
The Magic Formula Strategy, popularized by Joel Greenblatt’s book The Little Book That Beats the Market, has received mixed reactions from the stock market. Some investors have reported positive results using the strategy, while others criticize it for lacking a…
The 5 Asset Portfolio by Roger Gibson is a “lazy” index diversified portfolio that allocates assets across 4 asset classes: stocks, bonds, REITs, and commodities. These 4 asset classes are divided into 6 categories: U.S. stocks, international stocks, U.S. bonds,…
Stocks can be classified into four factors: value, size, investment, and quality. It is well-known that value stocks perform well, and small caps tend to outperform large caps. However, what about the quality factor trading strategy? The quality factor can…
The founder of Investor’s Business Daily (IBD), William O’Neill developed the CANSLIM method to help him pick the best stocks. In his best-selling book How To Make Money In Stocks, O’Neill described his method in detail. CANSLIM is a method…
Most people invest in real estate, perhaps quite logically since this is a very easy business model to understand. Equity (stocks) is perceived as riskier and thus less desirable as an investment. The aim of this article is to give…
Paul Merriman is a financial advisor and has presented several low-cost “passive” investment strategies. One of them is Paul Merriman 4 Fund Portfolio. What is it, and how has it performed? Paul Merriman 4 Fund Portfolio is a simple investment…
Sector trading and investing is a type of strategy where an investor focuses on buying or investing (and later selling) securities within a specific sector of the economy. For example, an investor may focus on buying and selling stocks within…
Do you sometimes wonder what are the historical returns for stocks, bonds, gold, real estate, and cash? Which asset class has performed the best over the last century? We are wondering, and we thus decided to compile all the data…
The Net-Net Value Investing Strategy, developed by Benjamin Graham and Warren Buffett, evaluates a company’s stock by considering its net current assets per share after adjusting for doubtful accounts and inventory values. Let’s find out how the net-net strategy works….
Ray Dalio’s All-Weather Portfolio was constructed to stand the test of time, no matter the investing climate – be it inflation, deflation, or stagflation. How did the portfolio perform during Covid-19, a period that witnessed enormous volatility? Ray Dalio’s All-Weather…
Rob Arnott is the founder and chairman of the board of Research Affiliates — a giant in wealth management with $193 billion in assets under management. Research Affiliates is famous for publishing seminal research and investing based on that research….
The Seasonal Timing Strategy by Sy Harding is an active, but simple strategy that uses market timings and can be implemented using asset classes and portfolios. Using this strategy, you do not need to be in the market 100% of…
Warren Buffett is for some considered the best investor of all time. Among his many lessons and contributions to the world of finance, one that stands out is the Warren Buffett indicator. This indicator is a measure of valuation for…
What is the relationship between the unemployment rate and stock market returns? This is a somewhat confusing and not-so-straightforward relationship. Thus, in this article, we try to investigate the unemployment rate and subsequent stock market returns. Is the unemployment rate…
Tyler’s Pinwheel Portfolio is a passive index portfolio that aims to diversify investments across stocks, REITs, bonds, gold and cash. The Pinwheel Portfolio strategy can be implemented with 8 ETFs. You do not need to pick individual stocks, bonds, REITs,…
Which is more profitable – trading or investing? Who makes more money – traders or investors? The short answer is that you can get rich quickly by short-term trading, but you are more likely to make money by long-term investing. A…
William Bernstein is a former neurologist turned financial expert and writer. He believes, like many other successful investors, that index investing is better than selecting individual stocks and that how you allocate your assets is more crucial than choosing specific…
What Are the Best Asset Classes to Get Rich? To become rich, you will need to choose a portfolio that will generate the highest possible return with the lowest potential risk. Imagine that you are a poor person who wants…
For many, owning a business or buying expensive real estate is out of the question. An alternative to growing your net worth over time is to invest in financial instruments such as stocks and bonds. In this article, we look…
The Ben Felix Model Portfolio, developed by Ben Felix and Cameron Passmore of PWL Capital, is a globally diversified investment strategy that utilizes index funds and tilts towards specific factors, such as Size, Value, and Profitability, for added potential returns….
Today we will introduce you to two main approaches to investing – passive vs. active investing strategy. An investor with a passive strategy will devote less time to the market and can increase capital at a pace in line with…
Some weeks ago I published an article looking at the worst month in the stock market: September. Today, 29th of September, as September is coming to an end, and we’re about to enter the best season being invested in stocks:…
In recent times, most investors prefer to invest using passive investment strategies with lazy portfolio management. Passive investing has “exploded” since the financial crisis in 2008/09, and part of this is due to the enormous growth of ETFs. Passive investing…
Let’s say you are a wealthy person who has already achieved FIRE (financial independence – retire early) and wants to preserve your wealth. It doesn’t matter what strategy or portfolio you used to achieve wealth because it requires completely different…
Ray Dalio’s All Weather Portfolio is a pretty well-known portfolio, and for good reasons, in our opinion. Ray Dalio and his team at Bridgewater Associates constructed the All Weather Portfolio to withstand every economic environment (and shocks) possible. What exactly…
Determining the right mix of assets to help you reach your short-term and long-term financial goals is the key to building a winning investment portfolio. For many years, financial advisors and experts recommend the 60/40 portfolio because of its simplicity…
What happens to stocks when interest rates go up? Our backtest reveals that when rates go up, stocks don’t perform well, just as the financial theory says they would. The cornerstone of the financial theory says that the higher the…
An investment checklist is handy, no matter your time horizon or investment style. The bare minimum is a mental checklist, but preferably it should be written. Like the aviation industry developed checklists to avoid disasters, investing is about error removals….
The Bernstein Coward’s Portfolio by Bill Bernstein aims to diversify investments as widely as possible across asset classes (bonds & stocks), countries, company size, and valuation. Bill Bernstein Coward’s Portfolio strategy can be implemented with only 9 ETFs, of which…
The relationship between interest rates and stocks is crucial to understand if you are investing in the stock or bond market. How does the S&P 500 perform when interest rates are rising? Interest rates and the stock market have an…
Would you like to know what the worst-performing group of stocks is? One certain type of stock has not made any money since JFK was president. That is 60 years. Yes, you read it right. 60 years! Any long-term mindset…
You are going to learn about the 22 best investment strategies for 2024 in this detailed article. Learning different investment strategies is important for achieving financial success. Investors, who vary in their risk tolerance from conservative to aggressive, are on…
The majority of investors think long-term. For instance, most US households, excluding the wealthiest 1%, predominantly keep their stocks, bonds, and bills in retirement portfolios. In fact, those not in the top 1% or even 10% of wealth distribution have…
Yesterday, the 3rd of September 2020, witnessed a pretty big drop in the stock market with Nasdaq leading the decline with a drop of 5.07%. Out of interest, I looked at the performance of September going back to 1970, using…
What is the Holy Grail of investing? The Holy Grail is often used to describe a method to achieve eternal success or happiness, depending on your goal. The Holy Grail is the lure of high and consistent returns in investing….
Bitcoin has appreciated a lot over the last years, and polarized discussions on social media continue endlessly about which asset will perform the best in the future. Many swear to Bitcoin and cryptos, while others swear to the more traditional…
The Gibson Talmud Portfolio by Roger Gibson aims to diversify investments across US stocks, REITs and bonds. The Gibson Talmud Portfolio strategy can be implemented with only 3 ETFs, of which 33.34% are US stocks, 33.33% are US REITs and…
Albert Einstein is famous for saying that compounding is the eighth wonder. But is he correct? Yes, to a certain extent, he is correct. Look at the example below: Disclaimer Quantified Strategies (SIA Lofjord) is not an investment advisor. The…
When stock markets are overbought, we can expect weaker returns than average over the next few days. But in the long term, returns gravitate toward the average returns. Thus, overbought stock markets only predict short-term results – not long-term. This…
It’s important to avoid trading mistakes to increase profits. “The good is mostly in the absence of the bad”, as it is nicely summarized in Nassim Nicholas Taleb’s Antifragile. Put short, if you avoid the gravest mistakes, winning tends to…
The Clyatt Sandwich Portfolio made by Bob Clyatt aims to diversify investments across stocks, REITs, bonds, and cash. The Clyatt Sandwich Portfolio strategy can be implemented with 9 ETFs. You do not need to pick individual stocks and bonds. According…
What is the optimal asset diversification historically? This is debated, but we came across an interesting study that looks at the best historical asset class diversification models over the last 100 years, all based on statistics and backtests. The main…
SPY is the ETF for S&P 500 and GLD is the ETF for the gold price. Michael A. Gayed, CFA, presented a SPY/GLD rotation strategy on ritholtz.com in July 2011. SPY is the ETF for S&P 500 and GLD is…
The lower the interest rates, the more attractive it is to own risky assets like stocks, gold, and Bitcoin. This relationship is at the cornerstone of the financial theory. In this article, we do a backtest to look at the…
Mebane T. Faber, along with Eric W. Richardson, is a co-founder of Cambria Investment Management and serves as the company’s Chief Investment Officer. In 2009, they released a book called “Ivy Portfolio,” which outlines their investment strategy. Let’s take a…
Is it possible to get rich by investing in stocks? If so, how do you get rich investing in stocks? It’s possible, of course, to get rich from stocks, given certain assumptions. However, being patient is mainly how to get…
Factor investing targets securities with specific characteristics, called factors, that have historically been associated with higher expected returns. Common factors include value, quality, momentum, size, and minimum volatility. Factor investing is a strategy that uses various attributes of securities, such…
After a positive year for stocks, S&P 500 tend to rise 6.75% the next year, not including dividends. If the S&P 500 drops one year, the next year return is on average 12.1%. After a good year in the stock…
Today we will look at Meb Faber’s Global Asset Allocation portfolio from his book of the same name. The Global Asset Allocation portfolio is a passive investment strategy that aims to provide investors with a diversified exposure to global asset…
Imagine what it would be like to have invested $100 in the stock market in 1928 and held on to it until today. What’s the growth of $100 invested in 1928? $100 invested in the stock market in 1928 would be…
There are many ways investors try to determine if the stock market is overvalued or not. Some people rely on technical indicators to gauge whether the market is overextended or overbought, while others employ valuation measures like the P/E ratio,…
Many investors are obsessed with identifying future multibaggers. How can you find multibagger stocks? Unfortunately, it’s not easy. In this article, we look at a specific research report that addresses how to find multibaggers. The main takeaways from the report…
Buy and hold has worked very well for long-term investors. History has also taught us that active money managers have underperformed S&P 500 or their benchmarks. We dream of becoming Warren Buffett, but most of us are below-average investors. Thus,…
Stock picking is difficult because only a small minority of the stocks contribute to the majority of the gains. It’s skewed to only a few outliers. It’s as simple as that. Let’s look at some facts: Most stocks don’t beat…
The Simple Path to Wealth Portfolio by JL Collins is a “lazy” index diversified portfolio that allocates assets across two asset classes: stocks and bonds. These two asset classes are divided into two categories: U.S. stocks and U.S. bonds. Thus,…
Hendrik Bessembinder, an academic, published a study in 2017 that went on to become widely spread and known. His hypothesis was pretty straightforward: do stocks outperform Treasury Bills? No, most stocks fail to beat one-month Treasury Bills during their lifetime…
The Coffeehouse Portfolio from Bill Schultheis aims to diversify investments across stocks, REITs, and bonds. The Schultheis Coffeehouse Portfolio strategy can be implemented with 9 ETFs. You do not need to pick individual stocks and bonds. Accordingly to our backtests…
The Merriman Ultimate Buy And Hold Portfolio by Paul Merriman aims to diversify investments as widely as possible across asset classes (bonds & stocks), countries, company size, and valuation. The goal is to have aa portfolio that achieves good risk-adjusted…
The relationship between stocks and interest rates is at the center of financial theory. Why? Because the interest rates determine the value of stocks. High rates equal less appetite for owning risky assets, and investors will only own risky assets…
Harry Browne was an American investment advisor and financial writer. He was best known for his investment philosophy and strategies, which he outlined in several books. In his book “Fail-Safe Investing,” Harry Browne introduced the Permanent Portfolio as a way…
How does war affect the stock market? Can we expect poor returns and increased volatility? Or is it a good time to buy when you hear the sound of cannons? Perhaps counterintuitive, history suggests that stock markets show less volatility…
The Second Grader’s Starter Portfolio by Paul Farrell is a passive index portfolio that aims to diversify investments across stocks and bonds. The Second Grader’s Starter Portfolio strategy can be implemented with only 3 ETFs. You do not need to…
Commodities are difficult to trade profitably, with few strategies offering any statistical edge. Despite this, finding effective commodities strategies might be worth the effort, as they allow for profits that are uncorrelated with those of other strategies and tend to…
Throughout history, gold has consistently held its position as the preferred global currency. Now, investors primarily acquire gold as a safeguard against economic instability and, of course, inflation. How does gold perform when inflation is high? Gold has famously been considered…
What happens to stocks when bonds go up (what happens to stocks when interest rates go down)? Any stock investor or trader should have a basic understanding of the relationship between stocks and interest rates. Why? Because the interest rates…
I signed my first client and proceeded to short my first stock. It almost proved to be my last. Over the next few weeks, I watched the stock trade up to 20, then 30, then 40, finally breaking through 50…..But…
Jack Bogle’s famous advice was to avoid searching for individual stocks, sectors, or markets that may perform better and simply invest in the entire market. This means using index funds to build a diversified portfolio. The Bogleheads 3 Fund Portfolio…
Many investors prefer to invest using passive investment strategies and “lazy” (but smart?) portfolio management. Increased knowledge, lower costs, and a rise in fund offerings (both ETFs and mutual funds) have contributed to this. Passive strategies include a popular asset…
Peter Lynch is a famous but retired money manager. Lynch managed the Magellan Fund of Fidelity from 1977 to 1990 with outstanding returns: more than double the S&P 500’s return. Lynch made 29.2% annual returns for his investors and retired…
A recent study about Norwegian traders and investors sheds some light on the returns (or lack of) based on diversification, age, wealth, and risk appetite. The study is called What Do the Portfolios of Individual Investors Reveal About the Cross-Section…
Meb Faber, a famous money manager and writer, has several times stated he is a trend follower at heart. Back in 2015, he published an article about momentum and trend-following strategy called Meb Faber’s Three-Way Model in gold, stocks, and…
Inflation is one of the most popular and important economic indicators. It is monitored by everyone — businesses, financial regulators, and investors. Not only does it guide regulators in their policies, but also, it affects businesses, which in turn, influences…
Are you tired of constantly monitoring the stock market and making emotional decisions that can hurt your portfolio’s performance? If so, then a quantitative investment strategy may be the solution for you. With the help of investment experts, this investment…
Some IPOs go on to be multibaggers, like for example Facebook, Amazon, and Netflix, to name the most successful, but this article provides you with 9 reasons not to buy an IPO. For every IPO success, many more failures tend…
Asset allocation is the allocation of investments across different classes of assets. In a broad sense, this means a combination of stocks, bonds, various securities and money market instruments. Within these classes, subclasses are also distinguished: Risk and return The…
Summary and introduction: Research shows that the majority of investors underperform the broad market indices. The most likely reason is due to frequent buying/selling and behavioral mistakes. When you are trying to “outsmart” the markets, you most likely end up…
In Street Name Your capital is at risk when you are investing in equity markets, but I assume very few consider the broker as a potential risk. But the fact is that your capital might be at risk if the…
The US stock market is about 50% of the world’s stock market capitalization. If you want a diversified stock portfolio it’s pretty natural to include US stocks in your portfolio. The good news is that you as a non-US citizen…
“Compound interest is the eight wonder of the world. He who understands it, earns it….he who doesn’t, pays it” -Albert Einstein Presumably, Albert Einstein said the words above, and likewise, Benjamin Franklin said that time is money. Unfortunately, we seem…
