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  • Brian Livingston’s back with a spectacular new book — about personal finance

    Posted on September 30th, 2018 at 07:27 woody Comment on the AskWoody Lounge

    Many of you remember Brian Livingston, the guy who wrote/co-wrote the Windows Secrets books. They became so popular he built a 400,000-strong newsletter subscriber base on it.

    Brian’s back, this time with a new book in a fascinating field. I just got a copy of Muscular Portfolios, and it has “best seller” written all over it.

    Brian’s spent the better part of a decade researching personal investment options, testing innumerable approaches, seeing what works, historically, and what doesn’t.

    He’s uniquely qualified to pull it all together. He has the computer background, financial background, the smarts, and the desire to invest. He’s also an extremely approachable writer, clear even to the uninitiated, and funny to boot.

    His strategy — actually, three strategies that vary depending on how much you have to invest — hinge on Exchange Traded Funds. ETFs, as you probably know, are extremely low-overhead baskets of assets that are readily bought and sold through online brokerage firms. Cheap. I like cheap.

    Or you can go hire an investment firm/buy into a mutual fund and pay their fees to see if they can do better. Pro tip: Over time, they don’t — just as Warren Buffet predicted.

    I got a kick out of this quote in the book, from asset rotation expert Steve LeCompte:

    Today, LeCompte is most famous for conducting a study called Guru Grades. He tracked 6,582 public statements by 68 stock market experts from 1999 to 2012. He found that only 47% of their predictions came to pass. That’s less than a 50/50 chance!

    If the gurus had simply said “The market will be up next month,” they would have been right 60% of the time. That’s because the S&P 500 rises in about 60% of all months. And yet only 7 of the 68 experts achieved an accuracy better than 60%.

    The trick lies in choosing the right ETFs, and balancing out your portfolio over time. You might think that would be difficult, but it isn’t: Brian’s Muscular Portfolios web site runs his formula constantly. Your job is to check in once a month, and re-adjust (buy and sell) ETFs to match his top three picks.

    Details — including years of regression test results, testing criteria, alternative investing methods (lunar indicator?), tax ramifications, and much more — are in the book.

    Brian also has a newsletter (of course) with both free and paid content. Take a look at the latest free newsletter to see what he’s up to: The September 11 issue talks about brokerage firms that “are taking their sweet time giving you higher yields in their cash sweep accounts.”

    I’ve already put my money in Brian’s approach. I have a small IRA that I inherited several years ago. Using a precursor of Brian’s Muscular “Baby Bear Portfolio,” and now the final version, that IRA has grown in spite of mandatory annual withdrawals. Could I have made more? Sure, if I’d had a sufficiently prescient crystal ball. But I’ve done reasonably well, I’ve spent about half an hour a year on the upkeep — it takes longer to do the taxes than to balance the portfolio — and I haven’t fretted even once.

    Fintech’s a hot topic these days. Brian’s been doing it for years. Get Muscular Portfolios (that’s an Amazon affiliate link). Sign up for the newsletter. And don’t pour your money down the drain.

    Good to have you back, Brian!