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Beating the Market, 3 Months at a Time: A Proven Investing Plan Everyone Can Use

Book Description

“The authors have created a simple, systematic plan that gives investors a long-term edge with minimal effort and reduced risk. They’ve done all the work for you, and it’s rewarding and easy to follow.”

–Bob Kargenian, President, TABR Capital Management

“There are diamonds in them thar hills’ — but to find investment grade diamonds it pays to have experienced guides. Gerald and Marvin Appel provide a simple but powerful plan for the often complex world of investment opportunities.”

–Dr. Alexander Elder, Author of Come Into My Trading Room and Trading for a Living

A Complete Roadmap for Investing Like a Pro That Requires Only 1 Hour Every 3 Months

  • The easy way to build a winning portfolio–and keep winning

  • Reduce risk, increase growth, and protect wealth even in tough, volatile markets

  • Absolutely NO background in math or finance necessary!

  • You can do better!

    You don’t have to settle for “generic” investment performance, and you needn’t delegate your decision-making to expensive investment managers. This book shows how you can quickly and easily build your optimal global portfolio–and then keep it optimized, in just one hour every three months.

    Top investment managers Gerald and Marvin Appel provide specific recommendations and simple selection techniques that any investor can use–even novices.

    The Appels’ approach is remarkably simple and requires only one hour of your time every 3 months, but don’t let that fool you: it draws on state-of-the-art strategies currently being used that really work.

    www.systemsandforecasts.com

    www.appelasset.com

    www.signalert.com

    If you know what to do, active investing can yield far better returns than “buy-and-hold” investing. But conventional approaches to active investing can be highly complex and time-consuming. Finally, there’s a proven, easy-to-use approach: one that’s simple enough for novices, quick enough for anyone, requires no background in math–and works!

    Gerald and Marvin Appel show you how to identify, and give you specific recommendations for, the best mutual funds, ETFs, bond funds, and international funds. They do not stop there. They demonstrate how you can quickly and easily evaluate each investment’s performance every 3 months, and how to make adjustments to continually optimize the performance of your portfolio.

    Using their easy to implement strategies, you can achieve better capital growth while reducing risk; profit from new opportunities at home and abroad; make the most of innovative investment vehicles; and protect your assets even in the toughest markets.

    Improving rates of return while you also reduce risk

    Setting intelligent investment targets and implementing strategies to meet them

    Identifying today’s most profitable market sectors…

    …and those that will continue to lead

    Short-term vs. long-term bonds, mature vs. emerging markets

    What to choose now, and when to switch

    Table of Contents

    1. Copyright
      1. Dedication
    2. Acknowledgments
    3. About the Authors
    4. Introduction
      1. Financial Planning and Sharp Investing Are Not Just for the Older Folk...
      2. Which Is Where This Book Comes In...
      3. Why and How to Become a Self-Sufficient Investor
        1. To Sum Up the Alternatives
      4. What You Will Learn from This Work
    5. 1. Putting Together a Winning Investment Portfolio
      1. The Stock Market Will Not Be Neglected...
      2. The Key Elements of Your Winning Investment Portfolio
        1. Balance
        2. Diversification
        3. Commodity-Based Investments as a Hedge Against Inflation
        4. Outperformance
        5. Goals
      3. Risk Levels Associated with Investments of Varying Investment Objectives
        1. Observations
        2. The Preferred Mix for Most Investors
      4. How Do You Decide on Your Blend?
      5. “He Who Fights and Runs Away Lives to Fight Another Day...”
        1. But What Happens if You Lose?
        2. Just to Restate...
        3. Portfolio Composition
    6. 2. Advanced Diversification and Risk Management
      1. An Example of Well-Balanced Diversification
        1. Portfolio Diversification Based on Industry Sector and Geography
      2. Using Mutual Funds to Represent Diversified Sectors
        1. A Basic Strategy
      3. Active Diversification Strategies—To Maintain the Balance
        1. Case History
      4. Drawbacks to Rebalancing
        1. A Compromise Solution That Provides the Best of Both Worlds
        2. One More Example
        3. Summing Up
      5. Referring to Historical Drawdowns to Measure Risk
        1. The Perils of Minimizing Risk
        2. The Midcap SPDR Exchange Traded Fund—Another Example
        3. Drawdowns Are Often Worse Than You Think
        4. Mentally Making the Correction
        5. Risk Control Is Vital, Financially and Emotionally
        6. Bond-Stock Balanced Portfolios
      6. The Two Major Vehicles for Diversified Investment: Mutual Funds and Exchange Traded Funds
        1. Pooled Capital—Professional Management
        2. Benefits of Mutual Funds
        3. Buying and Selling Mutual Funds
        4. You Get an Immediate Portfolio
        5. The Downside—Nothing Is for Nothing
        6. Scurvy Selling Practices of Mutual Funds and How You Can Beat Them
        7. How to Beat the System
        8. Summing Up
        9. Sources of Information Regarding Mutual Funds
      7. Exchange Traded Funds (ETFs)—The New Kid on the Block
        1. Enter the SPDRs
        2. Special Perks Provided by ETFS
        3. Nothing’s for Nothing
        4. Examples of ETFs
        5. Further Information
    7. 3. Prelude to Long-Term Wealth—Introduction to the Stock Market
      1. Broad Portfolios at Bargain Rates—Index Funds
      2. The Types of Mutual Fund and ETF Portfolios You Should Invest in
        1. Whales Versus Minnows: Large and Small Company Stocks
        2. Bargain Hunting or Headline Chasing: Value Versus Growth
        3. Own Real Estate Through the Stock Market
      3. Conclusion
    8. 4. Nothing Succeeds Like Success
      1. Most Investors Behave as if Past Performance Will Repeat Itself
      2. How to Pick Superior ETFs—A Momentum Strategy
        1. First Step: Select ETFs to Represent the Key Investment Styles
        2. Second Step: Select the Two Top ETFs Every Three Months
      3. Historical Results of the Quarterly ETF Selection Strategy
      4. Three-Month Strategy with Mutual Funds
        1. Results of Quarterly Fund Selection Based on Momentum
        2. How to Find Which Funds Are in the Top 10%
        3. Diversification Is Important—Do Not Use This Strategy on Individual Stocks
      5. Conclusion
    9. 5. Worldwide Opportunity
      1. An Overview of the International Equity Landscape
      2. Strategy 1—The One-Decision International Mutual Fund Portfolio
      3. The Importance of Currency Exchange Rates
      4. Historical Performance of Different International Markets: Europe, Japan, and Emerging Market Countries—The Old World Still Packs a Punch
        1. Japan and the Rest of the Pacific/Asian Region: Two Very Different Stories
        2. Emerging Markets: The Leaders of Tomorrow
        3. Diversification
      5. Strategy 2—Three-Month Momentum Selection Strategy with Europe, Japan, and Emerging Markets
        1. How to Put the Three-Month Plan in Motion with ETFs
      6. Conclusion
    10. 6. Bonds—An Investment for All Seasons
      1. How Much Should You Put in Bonds?
      2. Interest Income from Bonds—You Become the Banker
      3. Interest Rate Risks
        1. Yield to Maturity
      4. A Simple Strategy to Manage Interest Rate Risk—Bond Laddering
      5. How to Tell if the Bond Market Is Safe
        1. Reducing Interest Rate Risk While Keeping the Return
        2. Performance of the Interest Rate Trend Indicator
        3. Implement the Interest Rate Model Using Exchange Traded Bond Index Funds
        4. Investment-Grade Bond Mutual Funds
      6. Conclusion
    11. 7. Special Bond Market Investment Opportunities
      1. Higher Interest Payouts... But Greater Risk
        1. Bonds Have Credit Scores Too
      2. Floating Rate Bank Loan Funds—A Special Kind of High-Yield Investment
      3. The Safest Investment Anywhere—Treasury Inflation-Protected Securities (TIPS)
      4. Municipal Bonds—Don’t Share with the Tax Collector
        1. Different Types of Bond Investments to Suit Your Style
      5. Conclusion
    12. 8. Treasure in the Junkyard—How to Tame High Yield Bonds
      1. Bond Default—The Big Risk in High Yield Bonds
      2. How to Protect Yourself: Diversification
        1. Invest in the Best High Yield Funds
        2. Respond to Market Changes
        3. The First Step in Managing Risk Is to Recognize It
        4. How to Pick High Yield Bond Funds
      3. Three Months to Success with High Yield Bond Funds
      4. More Gain, Less Pain! Results of Risk-Control with High Yield Bond Funds
        1. Three Special High Yield Bond Funds
      5. Conclusion
      6. Appendix to Chapter 8: How to Download Total Return Data from Yahoo Finance
    13. 9. The Definitive Portfolio—The Whole Is Greater Than the Sum of Its Parts
      1. Alternative Portfolio Holdings
      2. The Four Key Strategies—A Performance Review
        1. Twenty-Eight Years of Outperformance
      3. Diversifying and Combining to Make the Definitive Portfolio More Profitable Than the Sum of Its Parts
        1. First Mission Task—Produce Higher Rates of Return at Lower Risk in Your Equity Portfolio
        2. Diversification Again Improves Results
        3. Improving Returns by Changing the Portfolio Blend
        4. You Can Eat Better or Sleep Better—The Choice Is Yours
      4. The Income Component—Preparing a More Profitable Brew from High Yield and Investment-Grade Bonds
        1. Improving Results with a 50–50 Blend
      5. The Definitive Portfolio of Stocks and Bonds—Returns Sufficient to Meet Your Financial Goals, with Acceptable Levels of Risk
        1. The Final Culmination of Your Study Program
        2. The Solution—Blend in the Bonds
      6. Improving Returns—If You Can Afford the Risk
      7. A Final Review of the Steps You Will Need to Take to Achieve Investment Success with the Definitive Portfolio
        1. Stock Components
    14. 10. Don’t Let Them Blow You Off the Planet!
      1. The Bad News
      2. Projections of Trouble Time Frames
      3. Summing Up the Situation
      4. Worse Yet?
      5. Government Employees May Be No Better Off...
      6. Corporations Have Already Begun to Welch on Their Promises...
      7. Rising Medical Expenses, Reduced Medical Cost Protection...
      8. Are They Trying to Blow Us Off the Planet?
    15. 11. Maybe the Politicians Can’t Do It, but You Can—Planning and Carrying Through a Long-Term Financial Program
      1. Flying Today, Paying Tomorrow Has Become the National Pastime...
        1. Credit Cards Feed the Fantasy
        2. Take the Quick Credit Card Self-Test
        3. Instant Money-Saving Idea
        4. Second Instant Money-Saving Idea
      2. Extending the Concept of Paying by Cash to Accumulate the Assets You Will Need Throughout Life
      3. How Much Money Will You Need for Retirement Purposes?
        1. The Magic Twenty!
        2. Calculation
      4. Adjustments That May Be Required
        1. Making the Adjustment for Inflation
        2. Commentary
      5. Examples of Asset Growth—Relatively Modest Rate of Growth of Relatively Moderate Capital Base, with Relatively Moderate Annual Additions to Your Assets
      6. The Effects of Higher Rates of Return Are Considerable
        1. Even Smaller Asset Bases Can Add Up Over the Years if You Stay Consistent...
      7. Starting Earlier in Life Can Make a Substantial Difference in the Growth of Your Assets
        1. The Power of Compounding
      8. One Final Example of the Power of Compounding—The One Contribution Retirement Fund
      9. Summing Up
    16. Internet Resources for Investors
      1. ETF Websites
      2. Historical and Current Mutual Fund, ETF, and Stock Performance Data
      3. Historical Economic Data
    17. Endnotes
      1. Chapter 1
      2. Chapter 2
      3. Chapter 3
      4. Chapter 4
      5. Chapter 5
      6. Chapter 6
      7. Chapter 7
      8. Chapter 8
      9. Chapter 9
      10. Chapter 10
    18. Financial Times Press