Investing for Retirement: Asset Allocation & Building a Diversified Portfolio

The central challenge to long-term investing is not how to increase returns; instead, it is how to manage risk. The solution is to construct a diversified portfolio tailored to your particular risk tolerance. Overall, it is key that you understand how your portfolio behaves during changing market and economic conditions so that you can stick with your desired asset allocation. Continue reading Investing for Retirement: Asset Allocation & Building a Diversified Portfolio

Investing for Retirement: Asset Classes That Individual Investors Should Avoid

For individual investors, non-core asset classes fail at least one of David Swenson’s rules. There are a number of fixed income investments that serve no valuable portfolio role for almost any investor. And, there are a number of actively managed asset classes that are only suitable for extremely sophisticated institutional investors, capable of investing in illiquid markets and possessing very long time horizons. Continue reading Investing for Retirement: Asset Classes That Individual Investors Should Avoid

Investing for Retirement: Core Asset Classes

In order to build a diversified portfolio, you must first select asset classes that have minimal correlation with one another. David Swenson, the Chief Investment Officer at Yale University, presents one of the best overviews of core and non-core asset classes for individual investors in Unconventional Success: a Fundamental Approach to Personal Investment. Here, we will focus on core asset classes. Continue reading Investing for Retirement: Core Asset Classes

Investing for Retirement: Overview

I began writing this book after several family members asked me for my perspective about investing for retirement. I shared a number of links to dense financial books and online financial management sites. For some reason, they didn’t have the time or inclination to read several bookshelves of books on investing. Instead, they asked me to distill all that information into something more straightforward. This book addresses investing for the typical individual investor. The information herein reflects the financial and investment knowledge that I believe everyone should possess. Continue reading Investing for Retirement: Overview

Investing for Retirement: Table of Contents

Contents Overview Defining Your Investment Objectives Building Your Net Worth by Budgeting, Saving & Investing Compounding, Inflation & Real Returns Controlling the Costs of Your Investing Risk, Return & Time Market Risk Other Types of Risk Longevity & Mortality Risk Health Risk Event Risk Tax & Policy Risk Investment Return Time Recalling the Lessons of History Predicting the Future Financial Market Efficiency The Efficient Market … Continue reading Investing for Retirement: Table of Contents