kyounge1956
Thinks s/he gets paid by the post
- Joined
- Sep 11, 2008
- Messages
- 2,171
I just read this book and found some aspects of it very interesting. The author, Leland B. Hevner, president of the National Association of Online Investors. Judging from a quick glance at the Association's website, I would estimate the book covers much of the same materials as the first three sections of their "Confident Investing" series of courses. The "Perfect Portfolio" consists of two segments. The Core segment is made up of US stock, foreign stock & bond index funds, plus cash, and the Target Market segment is made up of ETFs in REITs, gold, energy, agricultural commodities and/or emerging markets; the specific selection of asset classes in the Target Market segment is based on technical analysis. The book clearly spells out a process for deciding how much of your assets to put in the Core segment and how much in Target Market, and how to decide which of the five possible Target Market assets to include. Worksheets and other helps are available online but I haven't looked at them.
Completely new to me in this book was the information on trailing stops and other automated orders. I suppose this is nothing new to some of you, but I'd never heard of them before. I'm far from convinced that technical analysis has any validity, but it struck me as I was reading the book that this type of orders could be used in a buy/hold/rebalance style of investing too. The author uses these orders to get completely in or completely out of the assets in the Target Market segment, but I think they could also be used to trigger some action if the portfolio drifts too far away from one's chosen asset allocation, either to rebalance automatically or to get an email notification that the portfolio is out of balance.
A surprising omission is that the book makes no mention at all of TIPS. I would think these deserve consideration at least, for inclusion in the Core segment. Suggested funds for the bond allocation in the Core segment are broad bond index funds like VBMFX or FTBFX, or an ETF along the same lines, such as AGG. As far as I can tell from a Morningstar Instant Xray of each fund, none of the three include TIPS.
Completely new to me in this book was the information on trailing stops and other automated orders. I suppose this is nothing new to some of you, but I'd never heard of them before. I'm far from convinced that technical analysis has any validity, but it struck me as I was reading the book that this type of orders could be used in a buy/hold/rebalance style of investing too. The author uses these orders to get completely in or completely out of the assets in the Target Market segment, but I think they could also be used to trigger some action if the portfolio drifts too far away from one's chosen asset allocation, either to rebalance automatically or to get an email notification that the portfolio is out of balance.
A surprising omission is that the book makes no mention at all of TIPS. I would think these deserve consideration at least, for inclusion in the Core segment. Suggested funds for the bond allocation in the Core segment are broad bond index funds like VBMFX or FTBFX, or an ETF along the same lines, such as AGG. As far as I can tell from a Morningstar Instant Xray of each fund, none of the three include TIPS.