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 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

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Muscular Investing

Improve a 'Bad' 529 College Savings Plan - part 4

by Brian Livingston

Some 529-type college savings plans are so restrictive that no more than two portfolio changes per year are possible. • If you’re willing to do a little extra footwork, you may be able to adapt your portfolio to market conditions a bit more often — without market timing. Here are the details you need to maximize the gain of whatever your educational investment program may be. • Parts 1, 2, and 3 of this column appeared on Dec. 6, 10, and 11, 2018. • College savings plans can be some of the most restrictive tax-free investment programs out there. In the Read More 

Muscular Investing

Improve a 'Bad' 529 College Savings Plan - part 3

by Brian Livingston

After examining the investment choices a 529 plan offers, consider fees only as the second most important factor. • Don’t get hung up on a difference of 0.1 or 0.2 percentage point between one program’s fees and another’s. Having the full set of asset classes in a broad-ranging plan can give you a larger gain than a more limited plan, thereby outweighing slightly higher fees. • Parts 1 and 2 of this column appeared on Dec. 6 and 10, 2018. In Part 2 of this column, we saw that many college savings programs — called “529 plans” in the Read More 

Muscular Investing

Improve a 'Bad' 529 College Savings Plan - part 2

by Brian Livingston

Selecting a college savings plan from the scores that are out there is daunting, even for financial professionals. • Most ‘529-type’ tax-deferred programs are very restricted in their reallocation opportunities and don’t include a full set of global asset classes. Eliminating the most limited and costly plans can help you narrow down to a managable number the ones you should consider. • Part 1 of this column appeared on Dec. 6, 2018. So far in this column, we’ve seen that most college savings programs — called “529 plans” in the US Read More 

Muscular Investing

Improve a 'Bad' 529 College Savings Plan

by Brian Livingston

There are scores of different tax-free savings programs for college — and even K–12 private-school tuition, in some areas and plans. That’s a great way to cut taxes, but most of the accounts have limited investment choices and restrictive trading opportunities. Despite these obstacles, you can pump up your long-term gains using simple techniques.   My goal is to help the more than 100 million households in the US, Canada, and other countries that hold 401(k), 529, IRA, and similar investment accounts. The vast majority of 401(k) and 529-type plans offer only Read More 

Muscular Investing

Thrift Savings Plan (TSP) Traps 5 Million Federal Workers - part 4

by Brian Livingston

Even a limited, restrictive program, such as the Federal Thrift Savings Plan, can be managed for greater gains with smaller losses. My Plan IQ shows us a successful formula that’s been tracked in real time since 2001. And StockCharts enables investors to apply the method to the plan — free of charge. Parts 1, 2, and 3 of this column appeared on Nov. 20, 22, and 27, 2018. So far, we know that gradual monthly changes in the Federal Thrift Savings Plan (TSP) can give account holders almost half a percentage point more gain annually (which adds up!). We’ve also seen Read More 

Muscular Investing

Thrift Savings Plan (TSP) Traps 5 Million Federal Workers - part 3

by Brian Livingston

The Federal Thrift Saving Plan has many good features. But being limited to only five Vanguard mutual funds reduces participants’ gains and worsens their losses — unless those account holders know how to add an easy momentum factor to their choices. Parts 1 and 2 of this column appeared on Nov. 20 and 22, 2018. As we’ve seen, the Federal Thrift Savings Plan (TSP) can be greatly improved by a simple asset-allocation strategy, even though the program has severe restrictions. TSP prohibits account holders — more than 5 million government employees — from investing in Read More 

Muscular Investing

Thrift Savings Plan (TSP) Traps 5 Million Federal Workers - part 2

by Brian Livingston

An easy-to-follow variation — independently tracked in real time, not a backtest — boosts TSP’s gain while reducing its losses. The method eliminates any drawdowns worse than about 11%. By comparison, a buy-and-hold of the same assets fell 29%, which would compel many individual investors to liquidate. Part 1 of this column appeared on Nov. 20, 2018. As we’ve seen previously, the Federal Thrift Savings Plan presents severe limitations for serious investors. Although the plan boasts ultralow fees, which is good, it includes no more than five major asset classes: Read More 

Muscular Investing

Thrift Savings Plan (TSP) Traps 5 Million Federal Workers

by Brian Livingston

The largest tax-deferred, employer-matched contribution program in the US is the Federal Thrift Savings Plan. Unfortunately, its participants suffer from having few funds to choose from. The good news is that this can be fixed. Gradually changing the portfolio just once a month easily improves your gain while keeping your losses minimal — even during severe market crashes.   My goal is to help the more than 100 million households in the English-speaking world that hold 401(k), IRA, and similar savings accounts. Using 21st-century financial breakthroughs, you Read More 

Muscular Investing

Double the Gain of the Morningstar Bucket Portfolio - part 4

by Brian Livingston

Lazy Portfolios such as Morningstar’s generally ignore asset classes other than stocks, bonds, and REITs. Alternative assets, when combined with a Momentum Rule, give you diversification benefits that produce massive improvements in gains.   This is Part 4. Parts 1, 2, and 3 appeared on Nov. 6, 8, and 13, 2018. We’ve seen earlier in this column that a Lazy Portfolio promoted by Morningstar Inc. — known as the Bucket Portfolio — greatly improves its annualized return to 12.4% instead of 8.7%, with the addition of a single step. That tweak would have given you Read More 

Muscular Investing

Double the Gain of the Morningstar Bucket Portfolio - part 3

by Brian Livingston

Adding one simple change raises the Bucket Portfolio’s annualized rate of return by an enormous 3½ percentage points. Over a 45-year investing career, that would result in an ending value more than four times larger than the static, unchanging Lazy Portfolio version. The only difference is a Momentum Rule, which can be applied to other portfolios even more effectively than the Bucket model allows. Parts 1 and 2 of this column appeared on Nov. 6 and 8, 2018. As we saw in the previous parts of this column, the Aggressive Retirement Read More 

Muscular Investing

Double the Gain of the Morningstar Bucket Portfolio - part 2

by Brian Livingston

Morningstar’s ‘Bucket Portfolio’ is typical of so-called Lazy Portfolios — static investing strategies that never change the percentages allocated to a set of index funds. Fortunately, with one easy fix, we can add an amazing 3½ percentage points to the annualized return of Morningstar’s portfolio. The answer demonstrates a basic use of the ‘momentum factor’ — a rule that economists have proven in hundreds of peer-reviewed studies. This column is Part 2. Part 1 appeared on Nov. 6, 2018. The graph above shows a 45-year simulation of Read More 

Muscular Investing

Double the Gain of the Morningstar Bucket Portfolio

by Brian Livingston

One of the most widely marketed recommendations for individual investors is the ‘Bucket Portfolio,’ developed by Morningstar Inc. This strategy generally underperforms the market — but if you make one simple change, as I reveal in this column, the annualized return jumps by more than 3½ percentage points. That’s huge! It would DOUBLE the gain in your portfolio within a few years: a great benefit for a working career or a comfortable retirement. As I’ve written elsewhere, more than 100 million households in English-speaking countries alone — the US, UK, Canada, etc. — have money in Read More 

Muscular Investing

The Muscular Manifesto

by Brian Livingston

Whether you call it evidence-based investing, 21st-century behavioral science, or Muscular Portfolios, you’re living through a financial revolution. Simple, easy formulas beat the market — complex formulas fail. (The S&P 500 gained 97% in the 10 years ending February 2016, while the average equity hedge fund actually lost 6%.) With trading costs at all-time lows, it’s a Golden Age for you to make serious money. Best money-making trick on Wall Street — save as much as 3% My new book, Muscular Portfolios (Amazon, B&N), reveals today’s most profitable long-term Read More 

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