Muscular Investing

Brian Livingston
About the author: is the author of Muscular Portfolios (2018), which reveals the 21st century's best-performing long-term trading strategies, and editor of the free Muscular Portfolios Newsletter. He is also the coauthor of 11 Windows Secrets books (1991-2007). He has been assistant IT manager of UBS Securities, a consultant to Morgan Guaranty Trust (now JPMorgan Chase), and technology adviser to Lazard Ltd., all in New York City. His columns appear in the Muscular Investing blog most Tuesday and Thursday mornings. Learn More

Latest Posts

Muscular Investing

Adding a Single Rule to a Lazy Portfolio Isn't Good Enough

by Brian Livingston

Bolting just one step onto Lazy Portfolios lifts their gains. But that isn’t all investors want. Let’s build a superior strategy that’s still simple. • The noted academics Fama & French have demonstrated that ‘factors’ exhibit predictive power. It’s about time portfolios for individual investors accept these findings and update themselves to the 21st century. Figure 1. Eugene Fama (left) of the University of Chicago and Kenneth French of Dartmouth College published in 1992 their “three-factor model,” which evolved in 1997 into the “four-factor model.” Read More 

Muscular Investing

How to Make Your Portfolio Muscular

by Brian Livingston

Adding a single rule improves every so-called Lazy Portfolio. But just that one change doesn’t improve them enough to make them right for investors. • The 21st century offers an index investing revolution. We now enjoy superb tracking, near-zero commissions, and tiny fund fees. We can take advantage of these advancements to construct portfolios that are truly muscular and profitable. Figure 1. We can exploit many new investing developments — not just one single change — to create the most muscular financial strategies possible. Illustration by Talaj/Shutterstock Read More 

Muscular Investing

The Unconventional Success Portfolio Irons Out the Kinks

by Brian Livingston

Unconventional Success is a portfolio with a pedigree. It was designed by David Swensen, chief investment officer of Yale University. • His investing record is the best in the Ivy League. Swensen’s strategy for individuals, however, is not the same as his university’s endowment fund. Instead, he prescribes a super-simple Lazy Portfolio, ironing out complexity by holding only six index funds. Figure 1. The Unconventional Success Portfolio is actually a fairly conventional example of strategies called Lazy Portfolios. Photo by Everett Read More 

Muscular Investing

Aronson Family Taxable is a Plan for Household Wealth

by Brian Livingston

The Aronson Family Taxable Portfolio is for those people willing to allocate money to 11 funds. It’s performed fairly well but can be improved upon. • The strategy is reportedly one that Ted Aronson, a principal of the AJO wealth-management firm, puts his own family’s money into. With no transactions other than an annual rebalance, it’s intended to keep taxable events to a minimum. Figure 1. The Aronson Family Taxable Portfolio is a buy-and-hold strategy that’s intended to create transactions no more than once a year to hold taxes down. Photo by Pavel L Read More 

Muscular Investing

Ultimate Buy & Hold is the Most-Improved Lazy Portfolio

by Brian Livingston

The Ultimate Buy & Hold Portfolio allocates your money to 10 or 11 funds, depending on which of several published variations you decide to follow. • This strategy has the distinction that it improves more than any other Lazy Portfolio when a simple Momentum Rule is added. That doesn’t make it the best of all possible portfolios, but it does have valuable lessons for us. Figure 1. The Ultimate Buy & Hold Portfolio is intended to make investing as easy as a walk in the park, although it has nothing to do with Ultimate Frisbee. Photo by G-Stock Studio/Shutterstock Read More 

Muscular Investing

Easily Improve the Gains of the Ideal Index Portfolio

by Brian Livingston

The Ideal Index Portfolio is intended to give you a relatively aggressive allocation to equities, evenly split between US and international stocks. • That risk-on strategy gave Ideal a slightly better four-decade performance than the S&P 500 (including dividends). But it also resulted in an estimated 43% loss during the 2007–2009 bear market, worse than many investors can or will tolerate. Figure 1. The Ideal Index Portfolio equally balances US stocks and non-US stocks in its static asset allocation model. The positions do not change over the years as Read More 

Muscular Investing

The Gone Fishin' Portfolio Sets Its Lure with 10 Asset Classes

by Brian Livingston

The Gone Fishin’ Portfolio, like many so-called Lazy Portfolios, is promoted as requiring no changes over the years, no matter how bad the market gets. • The larger selection of asset classes it offers than most Lazy Portfolios do — 10 mutual funds or ETFs — may be the reason Gone Fishin’ notably improves with the addition of a single relative-strength rule. Figure 1. The Gone Fishin’ Portfolio was intended by its author to give you the time to go out and relax while your investments make money. Photo illustration by Tamik/Shutterstock. • Part 6 of a Read More 

Muscular Investing

The Coffeehouse Portfolio Does Well with a Momentum Twist

by Brian Livingston

The Coffeehouse Portfolio is so named not because you buy Starbucks, but because the strategy is so simple you could set it up in a coffee shop. • The formula holds seven assets at all times, with 40% in US stocks, 20% in REITs and non-US stocks, and 40% in bonds. The portfolio improves its gains if you add a simple Momentum Rule, but there’s a little surprise in the results. Figure 1. The Coffeehouse Portfolio, like most so-called Lazy Portfolios, is designed to be so simple that you could set it up while having a cup of coffee in a café. Photo by Dabchai Read More 

Muscular Investing

The Nano Portfolio is Basic But Has an Easy Path to Improvement

by Brian Livingston

The Nano Portfolio includes a significant exposure to global stocks, which is a healthy reminder that we shouldn’t put all our eggs in one US basket. • The strategy is called ‘nano’ (ultrasmall) because it holds only FIVE assets — fewer than other Lazy Portfolios. That’s not much diversification, but it’s just enough that holding only the strongest THREE assets every month sharply improves your gains. Figure 1. The Nano Portfolio’s allocation of one of its five positions to non-US stocks reflects the adage that you shouldn’t keep all your eggs in one Read More 

Muscular Investing

The 7Twelve Portfolio Greatly Improves with a Momentum Rule

by Brian Livingston

If you own 12 ETFs in equal weights at all times, you’re probably following the 7Twelve strategy, which holds more assets than other Lazy Portfolios. • The extra asset classes give 7Twelve some exposure to commodities and natural resources, which competing portfolios lack. Best of all, the broader menu allows 7Twelve to greatly improve, with much better gains and far smaller losses, when you add a simple Momentum Rule. Figure 1. Craig Israelsen’s strategy attempts to give investors exposure to seven global asset classes by holding 12 different funds at Read More 

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