Investment Articles

Choosing an asset allocation, or the mix of stocks, bonds and cash in a portfolio, is the most important decision that you’ll face as an investor. A study by Ibbotson Associates concluded that asset allocation decisions determine about 100 percent of investment performance for those who follow a low-cost, long-term investing strategy. Similarly, according to a Dalbar and Associates study, many investors underperform the market because they deviate from their asset allocation plan during market downturns. Investors who want to maximize their long-term investment returns must develop a risk-appropriate asset allocation plan that they can stick with in good times and bad.

Asset Allocation Step 1: Evaluate Your Risk Profile

A reliable, long-term asset allocation plan starts with a thorough understanding of your risk profile. It’s helpful to think of your risk profile in two parts: your risk capacity, or the degree of portfolio volatility that you can absorb financially, and your risk attitude, or your emotional tolerance for risk.

Risk capacity is influenced by factors like income and net worth, but its largest determinant is time horizon. Early in life, when retirement is far off, your future earning potential can be thought of as a sizable bond, allowing you to allocate the majority of your retirement portfolio to more volatile equity investments. As you grow older and your future earning potential decreases, it’s important to replace those bond-like expected earnings with a higher percentage of bonds in your portfolio. By the time you retire, most of your investments should be in bonds in order to provide a reliable, low-volatility source of income.

Risk attitude is more difficult to quantify than risk capacity, especially for first-time investors who haven’t experienced difficult market conditions. Many investors make the mistake of failing to understand their risk attitude until a market downturn occurs. This usually leads to selling equity investments at the worst time (the bottom of the market), only to miss out on a subsequent market rebound. To help avoid this phenomenon, investors can use resources like risk questionnaires and historical performance charts to help find a stock/bond mix with an emotionally acceptable level of volatility. These tools are far from perfect, however, so when in doubt, it’s best to err on the side of conservatism.

Generally speaking, your most conservative risk dimension (capacity or attitude) should determine your portfolio’s equity/bond split. For example, if you have the risk capacity to handle a portfolio of 80% equities, but can only stomach the volatility of a 70% equity portfolio, you should choose the more conservative allocation. Developing a plan that you can stick with in good times and bad is much more important than maximizing your expected return.

Asset Allocation Step 2: Break Down Equities and Bonds

Once you’ve settled on a risk-appropriate stock/bond mix, you can think about subdividing the equity and fixed income portions of your portfolio. The key to this part of the asset allocation process is finding a suitable tradeoff between simplicity and maximum expected return.

Modern Portfolio Theory tells us that by adding volatile asset classes that don’t move in lockstep with the rest of our investments, we can increase our portfolio’s risk-adjusted return. Based on that principle, consider adding international stocks and Real Estate Investment Trusts (REITs) to your equity portfolio. Companies outside of the US represent more than half of the value of global equity markets, and investors have historically been compensated for the risks that accompany international investing. Likewise, REITs offer a great diversification benefit and give investors unique exposure to the commercial real estate market.

Within your US and international stock allocation, you may also want to boost your exposure to small company and value investments, as investors have historically been compensated for the risks inherent in these investing styles. If you’re not familiar with the arguments for overweighting these equity segments, however, you should probably steer clear of them in favor of simplicity.

To expand your fixed income allocation beyond a broad sampling of the US Bond Market, consider adding Treasury Inflation-Protected Securities (TIPS) and municipal bonds. TIPS are unique because, unlike traditional bonds, their principal and interest payments adjust with inflation, so they offer a government-guaranteed rate of return above inflation when held to maturity. Municipal bonds are appropriate for investors in high tax brackets with taxable investment accounts, as the interest from these bonds is generally tax-exempt in the issuing state and at the federal level.

Portfolios can be sliced and diced in any number of ways, but a more complex portfolio is not necessarily a better one. Wise investors understand that their investing success will largely be determined by their ability to stick with their asset allocation plan, and for that reason, they err on the side of simplicity.

Asset Allocation Step 3: Implement Your Plan

Once you’ve broken down your portfolio into target percentages, all that remains is to implement your asset allocation plan. With literally thousands of funds to choose from, it’s best to narrow down the field by focusing on one factor that you can control: investing costs.

First, you can minimize the impact of many fees, expenses and taxes by investing in low-cost index funds and ETFs. If your workplace retirement account has limited choices, simply pick the lowest cost funds that fill a position in your asset allocation plan. Secondly, pay close attention to all applicable fees and commissions prior to doing business with a brokerage firm or mutual fund company. IRAs and other investment accounts are extremely portable, so there’s no good reason to stick with a high-commission broker. Finally, maximize your portfolio’s after-tax returns by placing tax-inefficient asset classes (e.g., REITs, Bonds) in tax-sheltered accounts.

Once you’ve settled on specific investment choices, help yourself stay on track by formally documenting your asset allocation plan in an Investment Policy Statement (IPS). This document provides an organized framework for recording your investing goals, philosophy and target allocation so that you can help yourself resist the temptation to stray from your long-term strategy. The ideal time to draft an IPS is while the rationale for your asset allocation decision is fresh in your mind.

Conclusion

More than any other factor, your ability to develop and implement a risk-appropriate asset allocation plan will determine your investing success. By thoroughly evaluating your investing risk profile, choosing an appropriate level of portfolio complexity, and picking low-cost investments, you’ve taken a giant step toward your long-term investment goals.

George Watkins is President of West Wind Wealth Management, an independent, SEC-registered investment advisory firm that specializes in index fund and ETF portfolios. A former nuclear-trained Naval Officer, George has a BS in Economics from Duke University and an MBA from Harvard Business School. To receive a free asset allocation recommendation or a personalized portfolio recommendation for as little as $19, visit http://www.invest-it-yourself.com.

Choosing an asset allocation, or the mix of stocks, bonds and cash in a portfolio, is the most important decision that you’ll face as an investor. A study by Ibbotson Associates concluded that asset allocation decisions determine about 100 percent of investment performance for those who follow a low-cost, long-term investing strategy. Similarly, according to a Dalbar and Associates study, many investors underperform the market because they deviate from their asset allocation plan during market downturns. Investors who want to maximize their long-term investment returns must develop a risk-appropriate asset allocation plan that they can stick with in good times and bad.

Asset Allocation Step 1: Evaluate Your Risk Profile

A reliable, long-term asset allocation plan starts with a thorough understanding of your risk profile. It’s helpful to think of your risk profile in two parts: your risk capacity, or the degree of portfolio volatility that you can absorb financially, and your risk attitude, or your emotional tolerance for risk.

Risk capacity is influenced by factors like income and net worth, but its largest determinant is time horizon. Early in life, when retirement is far off, your future earning potential can be thought of as a sizable bond, allowing you to allocate the majority of your retirement portfolio to more volatile equity investments. As you grow older and your future earning potential decreases, it’s important to replace those bond-like expected earnings with a higher percentage of bonds in your portfolio. By the time you retire, most of your investments should be in bonds in order to provide a reliable, low-volatility source of income.

Risk attitude is more difficult to quantify than risk capacity, especially for first-time investors who haven’t experienced difficult market conditions. Many investors make the mistake of failing to understand their risk attitude until a market downturn occurs. This usually leads to selling equity investments at the worst time (the bottom of the market), only to miss out on a subsequent market rebound. To help avoid this phenomenon, investors can use resources like risk questionnaires and historical performance charts to help find a stock/bond mix with an emotionally acceptable level of volatility. These tools are far from perfect, however, so when in doubt, it’s best to err on the side of conservatism.

Generally speaking, your most conservative risk dimension (capacity or attitude) should determine your portfolio’s equity/bond split. For example, if you have the risk capacity to handle a portfolio of 80% equities, but can only stomach the volatility of a 70% equity portfolio, you should choose the more conservative allocation. Developing a plan that you can stick with in good times and bad is much more important than maximizing your expected return.

Asset Allocation Step 2: Break Down Equities and Bonds

Once you’ve settled on a risk-appropriate stock/bond mix, you can think about subdividing the equity and fixed income portions of your portfolio. The key to this part of the asset allocation process is finding a suitable tradeoff between simplicity and maximum expected return.

Modern Portfolio Theory tells us that by adding volatile asset classes that don’t move in lockstep with the rest of our investments, we can increase our portfolio’s risk-adjusted return. Based on that principle, consider adding international stocks and Real Estate Investment Trusts (REITs) to your equity portfolio. Companies outside of the US represent more than half of the value of global equity markets, and investors have historically been compensated for the risks that accompany international investing. Likewise, REITs offer a great diversification benefit and give investors unique exposure to the commercial real estate market.

Within your US and international stock allocation, you may also want to boost your exposure to small company and value investments, as investors have historically been compensated for the risks inherent in these investing styles. If you’re not familiar with the arguments for overweighting these equity segments, however, you should probably steer clear of them in favor of simplicity.

To expand your fixed income allocation beyond a broad sampling of the US Bond Market, consider adding Treasury Inflation-Protected Securities (TIPS) and municipal bonds. TIPS are unique because, unlike traditional bonds, their principal and interest payments adjust with inflation, so they offer a government-guaranteed rate of return above inflation when held to maturity. Municipal bonds are appropriate for investors in high tax brackets with taxable investment accounts, as the interest from these bonds is generally tax-exempt in the issuing state and at the federal level.

Portfolios can be sliced and diced in any number of ways, but a more complex portfolio is not necessarily a better one. Wise investors understand that their investing success will largely be determined by their ability to stick with their asset allocation plan, and for that reason, they err on the side of simplicity.

Asset Allocation Step 3: Implement Your Plan

Once you’ve broken down your portfolio into target percentages, all that remains is to implement your asset allocation plan. With literally thousands of funds to choose from, it’s best to narrow down the field by focusing on one factor that you can control: investing costs.

First, you can minimize the impact of many fees, expenses and taxes by investing in low-cost index funds and ETFs. If your workplace retirement account has limited choices, simply pick the lowest cost funds that fill a position in your asset allocation plan. Secondly, pay close attention to all applicable fees and commissions prior to doing business with a brokerage firm or mutual fund company. IRAs and other investment accounts are extremely portable, so there’s no good reason to stick with a high-commission broker. Finally, maximize your portfolio’s after-tax returns by placing tax-inefficient asset classes (e.g., REITs, Bonds) in tax-sheltered accounts.

Once you’ve settled on specific investment choices, help yourself stay on track by formally documenting your asset allocation plan in an Investment Policy Statement (IPS). This document provides an organized framework for recording your investing goals, philosophy and target allocation so that you can help yourself resist the temptation to stray from your long-term strategy. The ideal time to draft an IPS is while the rationale for your asset allocation decision is fresh in your mind.

Conclusion

More than any other factor, your ability to develop and implement a risk-appropriate asset allocation plan will determine your investing success. By thoroughly evaluating your investing risk profile, choosing an appropriate level of portfolio complexity, and picking low-cost investments, you’ve taken a giant step toward your long-term investment goals.

George Watkins is President of West Wind Wealth Management, an independent, SEC-registered investment advisory firm that specializes in index fund and ETF portfolios. A former nuclear-trained Naval Officer, George has a BS in Economics from Duke University and an MBA from Harvard Business School. To receive a free asset allocation recommendation or a personalized portfolio recommendation for as little as $19, visit http://www.invest-it-yourself.com.

In our “can’t wait”, “get it now” society, wouldn’t it be nice to learn how to get more from your investment assets. Wouldn’t you like to secure a financial future for you and your family, while worrying less and prospering in both up and down markets? Obviously, this is the American dream! However, it is an achievable dream. Here are seven investing secrets to help you achieve these elusive goals. You won’t hear these from your broker!

1. Markets move in cycles. Learn to recognize these cycles and the investment strategies that prosper in that cycle. Right now we are in a secular bear market. Expect a lot of volatility and little long-term market movement within a large trading range.

2. Buy and hold won’t work right now. The reason, see secret #1. You need an actively managed investment strategy to win in this environment.

3. Trend following works in all cycles, especially secular bear markets. Find an advisor or manager who can spot up or down trends and ride them to profits within this longer term trading range.

4. Mutual funds are dead! Exchange Traded Funds (ETFs) are the way to go. They are low cost, marginable, can be traded intraday, give broad diversity of holdings, allow for stop loss orders, cover just about any stock, bond or commodity market and put and call options can be purchased or sold against the ETF position.

5. Risk management is the key to survival. Make sure you or your advisor have a written plan on how to manage your assets. This plan should also be specific as to when positions are entered and when (and how) they should be exited to protect your capital. This plan should be more than the standard investment policy statement.

6. Stay away from CNBC. This is the surest way to poor investment decisions is to get caught up in the 24 hype this channel must produce to keep an audience. If you must watch this channel, do so only during non-market hours.

7. Cut your losers short and let your winners ride. This is investing 101, but it is surprising how many people hold their losers and eagerly take profits on their winners. Let your winners ride as long as the trend is intact. Limit losses to no more than 6-8% of your position cost.

An author, registered investment advisor and Personal Financial Specialist, Jeff Diercks has helped high net worth and institutional investors grow their investment assets in both up and down markets for over a decade. Mr. Diercks is regularly featured in the mainstream media as a specialist in trend following investment strategies. Mr. Diercks’ firm, InTrust Advisors, has a multi-day mini-course that might help you achieve better investment results with your portfolio called “Seven Days to a Life Changing Investment Results.” This mini-course may be just what you need to get you motivated to secure your future today. You can sign up at http://www.intrustadvisors.com/investment-management-services/#sevendays.

On the surface, index investing seems like a perfect fit for do-it-yourself investors. The simplistic buy-hold-rebalance mantra of index fund proponents combined with the abundance of help from investing authors and online forums leads scores of informed investors to take on the task of personal portfolio management each year. Many DIY investors never look back; they treasure their newfound fiscal autonomy and the challenge of overcoming future financial hurdles. Others, however, discover that they lack the time, interest, knowledge or discipline to successfully negotiate the dangerous DIY terrain, and they ultimately seek help from an investment advisor. The purpose of this article is to clearly present the rationale for each approach so that index investors can decide which tactic best suits their needs and abilities.

Why Investors Do it Themselves

According to a 2006 study by the Investment Company Institute, the primary reason that DIY investors manage their own portfolios is that they want to be in control. There is a sense of empowerment that comes with making your own investment decisions, and DIY investors, especially men, like holding the reigns. The study also found that the majority of DIY investors believe that they have the necessary information and intellectual ability to make well-informed, prudent financial decisions without the help of a professional. In the minds of these confident investors, advisory fees are an unnecessary expense. Finally, many individuals find personal finance to be a rewarding hobby. According to the study, the majority of DIY investors enjoy conducting their own financial research, crunching numbers and closely monitoring their investments.

Others choose the DIY path not because they love the idea of managing their own investments, but because they dislike the idea of hiring an advisor. You may fall into this category if you place a high value on your financial privacy, believe that most financial advisors are incompetent or untrustworthy, or simply want to save money by not paying advisory fees. The fact that all investment advisors aren’t created equal provides little solace to those whose opinions have been shaped by the numerous investor scandals of the past year or by a poor past experience with an advisor.

Finally, there is a group of investors who acknowledge that they would benefit from professional help but lack an investment account large enough to capture the attention of an advisor. First-time investors often fall into this category and tend to seek advice from public sources, relatives or friends.

Why Investors Hire Advisors

A good investment advisor can add value to your portfolio in a number of ways. First, he acts as a gatekeeper, preventing you from making common return-reducing mistakes. Numerous studies have shown that individual investors routinely give up as much as 7% in annual returns due to frequent trading, attempting to time the market and chasing past performance. Even the most seasoned index investor needs the occasional reminder to avoid distractions and stick with his investment plan.

A good advisor also provides access to research, techniques and investment choices that have the potential to boost returns. By understanding complex issues like tax management, estate planning and retirement forecasting, an advisor can help you better understand the likelihood of reaching your retirement goals and suggest steps that you can take to tilt the equation in your favor. Additionally, he may be able to expand your investment choices by providing access to exclusive fund families or share classes.

Finally, a good advisor performs laborious tasks like portfolio monitoring and rebalancing so that you can devote your time to other pursuits. An advisor who monitors your portfolio frequently can ensure consistency with your risk profile while potentially squeezing excess returns from rebalancing activity.

Conclusion

Many investors want a quantitative answer to the question of whether to hire an advisor; they want to know definitively whether an advisor would provide them with higher investment returns after fees. In order to answer this question, you must first ask yourself whether you have been able to develop and consistently implement a low-cost, disciplined investment plan on your own. Many investors don’t have enough interest, knowledge or ability to develop a sensible plan; even more lack the necessary discipline to follow one. If you find yourself veering off the path to chase a hot new sector or time the market, there’s a good chance that an advisor would bring some return-boosting discipline and objectivity to your investment decisions.

If you do possess the mental and physical fortitude to develop a sound plan and consistently stay the course, you should probably look to qualitative factors to make your decision. For instance, would you rather spend the time that you dedicate to investment management on other things, like visiting family or pursuing other interests? For many investors, the answer to this question changes later in life as financial situations become more complex, the consequences of poor decisions become more severe, and time with family becomes a bigger priority.

The bottom line is that managing your own index portfolio may be simple, but it’s not easy. If you decide to oversee your own investments, defend yourself against the tendency to stray from your investment plan by drafting an Investment Policy Statement. If you decide to hire a professional, choose a fee-only advisor who agrees with your passive investing philosophy, embraces his fiduciary responsibility to act in your best interests, and is willing and able to add value in the ways described above. Whichever path you choose, you can maximize your chances of investing success by accurately assessing your risk attitude and capacity, designing a diversified, low-cost portfolio, and sticking with your plan.

George Watkins is President of West Wind Wealth Management, an independent investment advisory firm that specializes in index portfolios. He has a BS in Economics from Duke University and an MBA from Harvard Business School. To download helpful tools and tips for DIY investors, purchase a personalized index portfolio recommendation, or inquire about full-service wealth management solutions, visit http://www.invest-it-yourself.com.

“When you fall off the horse” you’re told to get right back on. After the last financial market episode, known as the credit crisis of 2008, you may be wondering how you will ever achieve financial security after seeing your 401k drop by more than 30% in one year. Even though the market has had a remarkable recovery since the bottom was struck in March, 2009, there is fresh data that shows the individual investor is not fully participating in the rebound so far.

According to the Investment Company Institute, since April of 2009 no net new money has been added to equity based U.S. focused mutual funds; the money is being allocated to bond funds instead, whereas the level of money market funds has remained steady. Perhaps these individual investors are saying to themselves “fool me once shame on you, fool my twice shame on me”. This behavior is understandable, even expected. Maybe the general investor population knows something the professionals do not about the future of equity returns in America. One can only wonder.

Below are 17 guidelines to consider when investing or reinvesting for your future to achieve financial security and reduce personal financial risk. The underlying premise is to remain fully invested through out your life and connect your investments to a purpose, such as retirement or paying for your kids college education. Another premise is to use your entire life to finance your life’s liabilities, not just the middle 30 or 40 years while working. This reduces personal financial risk.

A summary of this guidance follows:

1. Use your full “century of life”, not just your middle 40 years; start accumulating assets and managing liabilities as early as you can; optimize the long compounding period in front of you; remember the value of lump sum deposits, even small ones

2. Prepare an accounting of your life’s liabilities as of today; take regular check points to make sure your funding plans are on track and reduce exposure to longevity risk – address serious funding gaps as soon as you can

3. Define your investment purpose and do not invest without a purpose; prepare an investment policy statement, particularly if you work with an adviser

4. Trading is not investing and investing is not gambling;

5. Maximize compounding benefits by using funding compartments – make the difficult choice between spending today and saving; less time means more risk and more anxiety

6. Have conviction. Stay invested in the market at all times, otherwise stay out entirely and find some safer investments; diversify and don’t concentrate your investments

7. Be religious about taking and securing your gains by placing them into your safe deposit account

8. You cannot beat systemic risk, but be alert to significant changes often telegraphed well ahead of time – control your response to it so check your emotions

9. Use insurance to protect against risks to your quality of life – even if you think you can self fund risk – why would you? Insurance is a much cheaper way to go

10. Have sufficient liquidity at all times

11. Secure your income for later in your century of life; cash flow keeps your life flowing the way you want

12. Get rid of unproductive assets – if the house is a burden and you could use the equity then do it

13. Remember only you can be accountable to you; all others may not put your interest first unless they are obliged to by law

14. Make changes to your investments when you decide they no longer fit your investment purpose – do not let anyone force you into a change you do not understand

15. If you have to trust someone, there are many advisers out there who really want to help you finance your century of life; if you want to do it on your own make sure you have the time, tools and the temperament

16. Be careful with web sites, blogs and trendy financial columns, that profess to know what is going to happen in the market beyond today – NO ONE knows. Avoid the get rich quick trading systems and strategies – it usually involves investment concentration

17. Investing mistakes are seldom fatal, except when you concentrate; do not get scared away; remember the parable about “when you fall off the horse…”

You can take charge of achieving financial security. It is your quality of life – you earned it.

Thomas Warren is a Certified Financial Planner(R) practitioner. He resides in Oceanside, N.Y.

Comments about this article can be sent to ACenturyoflife@gmail.com

The majority of advice given to individual investors relates to developing an investment plan: evaluating risk tolerance, choosing an appropriate mix of assets, controlling costs, etc. While these considerations are all important drivers of investment success, a singular focus on plan development often causes implementation to suffer.

In order to promote the disciplined execution of a portfolio’s investment strategy, pension plans, foundations and trusts often draft an Investment Policy Statement (IPS). This document formally outlines the investment objectives, philosophy, boundaries and procedures for managing the portfolio so that plan advisors don’t stray from their clients’ intentions. Individual investors can get a similar benefit by drafting their own Investment Policy Statements. A brief, well thought out IPS can help an investor stay focused on his goals and systematically resist the natural human tendencies that seriously harm investment returns.

Investors Behaving Badly

There’s an abundance of research on individual investor behavior, and very little of it is encouraging. Barber and Odean’s landmark study, in which 66,465 household accounts were examined from 1991-1996, found that individual investors trade too frequently, thus destroying returns. The most active traders in the group underperformed a buy-and-hold portfolio by over 7% annually, while the average investor’s returns lagged an inactive portfolio by over 2% per year. According to the study, the root cause of this behavior was overconfidence, a trait that was especially pronounced in men. Specifically, investors were confident in the future movements of the overall stock market or a particular sector, and they invested accordingly. Unfortunately, they were frequently wrong.

Similarly, Dalbar’s 2009 version of its Quantitative Analysis of Investor Behavior study examined the returns of mutual fund investors from the beginning of 1989 through the end of 2008. The study found that the average US equity investor earned an annual return of 1.87% compared with the 8.35% annual return of the S&P 500. The stark difference in performance, according to the study, could be attributed largely to investors abandoning equity mutual funds during declining markets (selling low) and reinvesting following a market rebound (buying high). The study doesn’t pinpoint a solitary causal factor, but this phenomenon usually occurs when investors overestimate their risk tolerance, misunderstand the risk-return tradeoff, or seek safety in numbers through “herd” behavior.

How an Investment Policy Statement Can Help

Fortunately, there are steps that DIY investors can take to counteract their destructive behavioral tendencies. First, it’s important to develop an investment plan consistent with your risk attitude and capacity. When unsure whether a certain level of portfolio volatility is acceptable, it’s prudent to err on the side of conservatism. The worst time to discover your risk tolerance is during a market decline. When determining your target asset allocation, it’s also a good idea to specify events that would trigger a portfolio rebalancing. Without specific rebalancing criteria (e.g., acceptable bands for each asset class), the door is left open for impulsive trading.

Next, formalize your plan in an Investment Policy Statement. An IPS should include your investment objectives, account balances, current income and future liquidity needs, risk profile, target allocation and rebalancing bands, investment philosophy and fund selection criteria, and plans for periodic IPS reviews. Drafting an IPS may seem burdensome, unnecessary or redundant, but without the ongoing help of an investment advisor, this simple document performs the vital role of a bad behavior gatekeeper. When you’re tempted to abandon your risk-appropriate allocation during a market downturn, your IPS will remind you of your investment plan’s rationale and encourage you to stay the course. When you get a “can’t miss” stock tip from a friend, your IPS will tell you to keep your distance. And when you get your investment account statement at the end of the year, your IPS will provide a valuable performance measuring stick. Your IPS could be all that stands between you and your return-reducing behavioral tendencies; don’t pass up this opportunity to add discipline to your investment plan.

Conclusion

Legendary investor Benjamin Graham said, “The investor’s chief problem – and even his worst enemy – is likely to be himself.” There’s plenty of research confirming Mr. Graham’s hypothesis, but fortunately, there’s hope for the individual investor. By understanding the impact of human behavior on investment returns and devising a disciplined plan of attack in the form of an Investment Policy Statement, DIY investors can overpower damaging behavioral forces and increase their chances of achieving their financial goals.

George Watkins is President of West Wind Wealth Management, an independent investment advisory firm that specializes in index portfolios. He has a BS in Economics from Duke University and an MBA from Harvard Business School. To download George’s sample Investment Policy Statement (IPS), view other tools and tips for DIY investors, or to purchase a personalized index portfolio recommendation, visit http://www.invest-it-yourself.com.