Frank Armstrong

[PJ03]

This goes to the experts on here… I’m about half way through Frank Armstrong’s new book.
I really like his (Slice & dice) way of putting together a portfolio; I know it’s based on the MPT. But it seems to me that one would need an adviser to put it in place and to keep it properly allocated.
Do any of you guys have an adviser? Can this portfolio be set up and allocated correctly by a newbie such as myself.
My biggest concern would be too much overlapping.

 

[ESRBob]

PJ
I liked Armstrong's first book, (haven't seen the new one) but don't forget he is an advisor and may be subtly leading you to the conclusion that you need an advisor to do this. I really don't think that would be true for most people. Overlap shouldn't be a big problem even if there is some -- just going from wherever you are today to a reasonably sliced and diced Do-it-yourself portfolio will probably bring you 90%+ of the benefits.

Besides, how much overlap can there be between USLarge and US Small, Emerging Markets and International Large or between US Bonds and International Bonds? (even International Small has essentially no overlap with emerging markets -- the international small are almost always drawn from major developed countries). Just be aware that if you buy a "Global Bond Fund" as opposed to an 'International Bond Fund" the former will have U.S. bonds in it.

If you become convinced that you need DFA funds to achieve your slice-and-dice mission, then that would be a reason to go find an advisor approved to sell DFA funds, but otherwise I think you can do it yourself-- ask some questions here, look at sample portfolios, ask people here to compare and contrast funds you've been thinking of using, and you won't be far off. None of this stuff is perfect-- we are always peering through a glass darkly so 'pretty good' is probably as good as you'll ever need or get.

 

[Nords]

Do any of you guys have an adviser?

Nah. This discussion board is not an advocate of using financial advisors.

Can this portfolio be set up and allocated correctly by a newbie such as myself.

Yes. Heck, you're able to read & understand the book, which is a challenge that stretches the capabilities of many financial sellers advisors.

One key is to rebalance regularly but to not be anal-retentive about it. Some retirees rebalance when they make their annual cash withdrawal, some workers rebalance by putting new cash into the lagging assets, and everyone should only worry about rebalancing with they're more than 5-10% away from their intended allocation.

As for overlap, there are plenty of analysis tools (M*'s portfolio X-ray, Financial Engines, LionShares) to help you avoid the pitfalls.

As Home Depot says, you can do it-- we can help.

 

[PJ03]

Guys, thank you both. That book does point one in the direction an adviser. Maybe I'm reading too much.