Published Articles from Craig Israelsen and Andy Martin
The 60/40 Portfolio Will Outlive Us All by Andy Martin
As two recent commentaries demonstrate, in their zeal to promote their agendas, asset managers are claiming that the humble 60/40 portfolio is doomed to the dustbin. But their analysis is flawed. The 60/40 will outlive us all.
Diversification Fails for Stocks, But Wins for Bonds by Andy Martin
Advisors routinely assume the benefits from diversifying across equity asset sub-classes and between equities and bonds. But they ignore the even greater benefit from diversifying among categories of bonds. If advisors widen their asset class choices when building income portfolios, investor outcomes will improve
A Bear Market is Coming, What to Do? by Andy Martin
There have been 25 Bear Markets since 1929. The average time between Bear Markets has been 31 months. As of February 2020 we’ve gone 131 months without a Bear Market. A Bear Market is coming. Are you ready?
The Secret to Portfolio Performance Consistency by Craig L. Israelsen
How many funds are needed to create a diversified portfolio? While there is no absolute answer, let’s explore a range of diversification strategies — from a one-fund to a 12-fund portfolio. An important secondary goal when building portfolios is to keep things relatively simple, so the construction and management of the portfolio is not overwhelming.
Does Patience Really Pay Off? by Craig L. Israelsen
Many advisors may have kicked off 2016 by fielding communications from panicked clients, as equities plunged into a sea of red. But does the recent under performance of equities, particularly of large-cap U.S. stocks, mean catastrophe for these clients’ portfolios? Not if they are diversified — and patient.
The 7Twelve® Portfolio: An Introduction by Craig L. Israelsen
This brief report introduces a multi-asset portfolio design that brings a higher standard to the notion of “diversified”. This design is referred to as the 7Twelve portfolio. The name “7Twelve” refers to “7” asset categories with “Twelve” underlying mutual funds. The seven
asset categories include: US stock, non-US stock, real estate, resources, US bonds, non-US bonds, and cash.
2015: A Year of Contrast in Asset Class Performance in the 7Twelve® Portfolio by Craig L. Israelsen
Shown below are the 1-year returns for all 12 asset classes in the 7Twelve Portfolio (Passive ETF-based model) from January 1, 2015 to
December 31, 2015. Also shown is the performance of the 7Twelve Passive Portfolio itself. The best performing single asset class in 2015 was
real estate, followed by large cap US stock.
Three Essential Points For All Investors by Craig L. Israelsen
We can’t guarantee the performance of our investment portfolio, but with sacrifice many investors can contribute 10% of their income each year into their retirement accounts. Control what is controllable. Our savings rate (or contribution rate) is more controllable than our
Building a Better Balanced Portfolio by Craig L. Israelsen
It’s time for a better “balanced” portfolio. Way back when, there were two dominant investment categories (or asset classes), namely US stock and US bonds. These two assets became the mainstay ingredients in balanced mutual funds, with the typical ratio being a 60% allocation to large US stocks and a 40% allocation to bonds.
Dear Mrs. Yellen, I Don't Care What You Do by Andy Martin
Fears of rising interest rates have become background radiation, exposing everyone. A recent Eaton Vance survey, Advisors’ 4 Biggest Concerns: Eaton Vance, of 1,006 advisors concluded that, “nearly three-quarters of advisors report at least some concern about a near-term increase in rates, and one in five say they are very concerned.”
Andy Martin at Financial Advisor's Conference on Alternative Investments
What do Greece, China, the Euro, massive world debt, and the US stock market all have in common? They’re all better with alternative investments. That was the message at the 6th Annual ‘Inside Alternatives’ conference sponsored by Financial Advisor and Private Wealth in Denver July 13-14.
The $700 Million Man + Achieving Higher Returns with Lower Risk
In this episode, host Ron DeLegge tells an incredible story about the $700 million man. Ron's program guest is Andy Martin, President at 7TwelveAdvisors.com about his new book titled Dollar Logic: A 6-Day Plan to Achieving Higher Returns by Conquering Risk. Memo to listeners: Ron has analyzed and graded more than $100 million in investment portfolios. Does your portfolio PASS or FAIL?
Bursting the Bond Bubble Babble by Andy Martin
Interest rates will eventually go up. The 50-basis-point spike in May on the 10-year Treasury bond may have been the beginning. But despite industry and media assertions, history shows that there is nothing to fear from rising rates.
Must Bond Investors Fear Rising Rates? by Andy Martin
Thirty-one years ago, in 1981, the one-year Treasury reached its all time high of 14%. Today it hovers around 0.10%. Never before have interest rates fallen so far. Many economists and investment advisors, seeing nowhere to go but up, expect interest rates to
climb from these historic lows. But that would not be the catastrophe that many bond investors fear.
Kill the Two-Asset Model By Andy Martin
Like you, I was sitting in my office in fourth quarter of 2008 looking for a safe place from the earthquake of bad news that was pummeling the capital markets. Like you, I was surprised that even my most conservative portfolio — stocked with judicious and sensible mixes of investment grade bonds, large-cap blue-chip stocks and cash — was getting crushed. Dedicated to David Geracioti, former editor Rep. Magazine.
Go, Portfolio. Go! By Craig L. Israelsen
Big portfolios, little portfolios. Big investors, little investors. “Do you like my investment portfolio?” “I do not. It is not diversified.”“Good-bye.”
“No, don’t go. I will teach you about diversification.” “Okay, but please make it short.” “Okay."
The Rise of Passive and Index Investing, and Its Effect on Market and Liquidity Risk By Andy Martin
The most profound developments in the investment markets in the last 20 years have been the growth of indexed-based investing and the move to passive fund management. What systemic risks arise because of this growth?