Using Dynamic Asset Allocation to Boost Returns
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Think of static asset allocation as where to set your sails and dynamic asset allocation as a way to keep your balance as your boat glides and sometimes bounces through the waves.

The Shiller Ten-Year P/E Ratio
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What we would really like to measure are the changes in price (P) that cause a company with a good long-term track record to look relatively cheap. Economist Robert Shiller created just such a measurement.

Style Boxes and the Efficient Frontier
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The Marotta allocation method is a proportionally weighted allocation based on the square of each Sharpe ratio. Squaring the Sharpe ratio drastically reduces asset categories in proportion to their distance from the efficient frontier.

Asset Allocation and the Efficient Frontier
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Crafting portfolio asset allocations is a combination of art and engineering. Just as a blending of colors can produce cerulean, so a blending of indexes produces a unique shade of risk and return.

The Efficient Frontier
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The efficient frontier measures all investments on a scale of risk and return. Risk is commonly placed on the x-axis, and return is placed on the y-axis.

Value: The Third Factor of Investing
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A stock’s valuation is measured on a continuum from “value” to “growth” In broad strokes, value stocks are cheap and growth stocks are expensive.

Size: The Second Factor of Investing
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The second factor of investing is size as measured by a stock’s total capitalization. Over time small cap will outperform large cap even after factoring out measurements of volatility.

CAPM: The First Factor of Investing
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Modeling investment returns seeks to find an equation to predict your expected returns as much as possible. The simplest equation for the markets would be “Return equals 11.71%.” This has been the average return from 1927 through 2010, the zero factor model.

Before You Say “I Do”: Money & Marriage Exercise 1
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Couples that fail to prepare for a shared money maturity will likely experience longer and sharper growing pains.

Gain $152,000 by Smart Filing for Social Security
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Social Security benefits can represent a big stack of cash. A typical monthly benefit of $2,200 has a present value well over $500,000. Consider all your Social Security options carefully to avoid making a costly mistake.

Roth IRA Conversion 2012: Are You a Good Candidate?
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You may be a good candidate for a Roth conversion in 2012 if you can answer “yes” to any of these statements.

Freedom Investing 2012
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Now at year end, I will review how freedom investing fared in 2011 and in the decade since 2002.

Indexing Works
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“Many investors think active managers can shift out of stocks in time to stem losses in bear markets. Not true.”

Compute Your Net Worth Once a Year – 2012
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Computing your net worth annually is like taking a sextant reading to chart your course toward financial security. Net worth gives you a snapshot of how much money would be left if you converted everything you owned into cash and paid off all your debts.

Seven Financial Resolutions for the New Year 2011-2012
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Financial resolutions usually don’t even last until the end of January. Making a permanent change in our behavior requires both time and a steely resolve. We can only develop financial character one action at a time. Here are seven practices to take you from pauper to prince or princess if you add one each year.

Rich Dad, Empowered Daughter
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With impulses reeling, it is easy to find a gift that children will appreciate but difficult to find one that they will love to have. The gifts that I loved to have and the presents that I still cherish are the vocational gifts that my parents purchased for me.

A Wealth of Satisfaction
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True life planning begins when you realize you are unique. There will never be another you in the history of the universe. Your calling is yours alone. Understanding yourself is the first step in managing your financial affairs to support your life plan.

Investing Mostly in Bonds Means a Lower Lifestyle in Retirement
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In the midst of this turmoil, especially after this past summer’s sharp drop, many investors wonder if they should put all of their investments into something safe and avoid the markets altogether.

Is My House an Investment?
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Just because something costs a lot doesn’t mean it is an investment. An investment is something that pays you money.

Rich Dad’s Money, Rich Daughter’s Money
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If my parents had been in control of the purse strings, I would not have learned the value of money. To a child, “My Money” is valuable where “Your Money” is worthless.

Rich Dad, Patient Daughter
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With money in my pocket and impulse in my veins, I used to cherish our weekly trips to Toys ‘R’ Us. However, it was on the Barbie aisle under my parents’ guidance that I became a money-savvy kid with the millionaire mindset.

Rich Dad, Working Daughter
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When it comes to teaching financial lessons, setting a good parental example is important, but actually giving the child some experience making wise financial decision is essential.

Stop Telling Yourself These Three Financial Lies
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Most of us rationalize why we can’t get our finances together right now. Many Americans prolong these excuses during their entire working careers. Here are three lies you must stop telling yourself in order to build a solid financial foundation.

Rich Dad, Rich Daughter
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“Small changes over a long period of time make all the difference.” Learn how to teach financial wisdom to your children with Megan Marotta’s series, “Rich Dad, Rich Daughter.”

Can financial advisers be trusted?
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Not every investment consultant has your interests as the top priority, or even the necessary credentials. Here’s how to find the right type of adviser.

How to Maximize Long-Term Returns
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I recently read two articles that provided insight on how investors should respond to a market downturn.

Continue to Avoid the ‘Ring of Fire’ Countries
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Americans seem to be divided on the importance of raising the U.S. debt ceiling. Regardless of your personal politics, avoid investing in countries that cavalierly allow their debt and deficit to balloon.

Aligning Your Money and Your Values
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The old saying is true: Money can’t buy happiness. Families earning $25,000 a year overspend trying to keep up with those making $50,000, who in turn attempt to live like those making $100,000. For many families the lure of consumerism wins out over qualities like foresight and patience that saving requires.

Ten Questions to Ask a Financial Advisor
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Someone asked me what disclosures I would require for financial advisors. I’ve written these principles in a yes-or-no format and reworded the questions. “Yes” is the best answer and “no” means you should seek more information or not consider that advisor at all. Although answering affirmatively to all 10 questions would be my first screen in selecting a financial advisor, it still does not guarantee the person has the competence necessary to offer comprehensive wealth management.

Where in the World Should You Invest?
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Finding countries where you can plant your investments in fertile soil may be one of the most important asset allocation decisions you make for the next several years.

Save 97 Percent of Any Windfall
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Surprisingly, studies show that onetime windfalls can actually impoverish you. They make you feel rich, which inevitably leads to overspending. But wealth is what you save, not what you spend.

Multiple Accounts: An Essential Management Tool
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To build real wealth, you need specific wealth management tools.Most families have less than half of the accounts they really need, and young newlyweds often only have a checking account.

Pay Yourself First
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The greatest engine to generate real wealth is saving and investing. And the best way to ensure that your default is saving and investing is to automate the process. Pay yourself first, and your savings will grow exponentially.

You Deserve a Fiduciary Standard of Care
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Most investors are not aware of a critical division of professionals in the world of financial services. This distinction lies between fee-only fiduciaries who are free to act in your best interests and commission-based agents and brokers who are required to act in the best interest of the companies that employ them.

Saving: the Most Fundamental Element of Wealth
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Everything in wealth management begins with savings. All wealth comes from producing more than you consume. Unfortunately, most Americans are better at consuming than producing.

Invest in All Six Asset Classes
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Many U.S. investors crowd their assets into a combination of large-cap U.S. stocks and U.S. bonds. This allocation represents only one and a half of the six asset classes described here.

Life Planning Part 3: Twenty-Four Hours to Go
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Imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What did you miss? Who did you not get to be? What did you not get to do?

Life Planning Part 2: Just a Few Years Left
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“Imagine that you visit your doctor, who tells you that you have only 5-10 years to live. You won’t ever feel sick, but you will have no notice of the moment of your death. What will you do in the time you have remaining? Will you change your life and how will you do it?”

Life Planning Part 1: Plenty of Money
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Life planning takes a holistic look at what you truly value. And for most people, their life is more important than their money. Only after exploring your life goals can you structure your finances to help you realize your dreams.

Appreciating Assets Part 2: Other Investments
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Your investments should be working for you, appreciating more than inflation to become an engine of growth that pays you money and provides some measure of financial freedom.

Appreciating Assets Part 1: Stocks and Bonds
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All assets are not equal. Some investments appreciate better on average than others.

Fourteen Tax Management Techniques
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No one approaches financial planning with the goal of paying more taxes. Tax management, like all financial planning, is based on the premise that small changes made over time can achieve big goals.

Women Have Unique Financial Needs
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Retirement planning is even more crucial for women than for men.

A Full Credit Lockdown
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Identity theft is becoming distressingly common as personal information becomes easier to swipe.

Safeguard #7: Avoid Investment Advisors Who Sugarcoat Reality
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Excellent advisors communicate clearly exactly how bad the markets have been and can be.

Getting Started With Investing
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There isn’t a better time to invest than today. Getting started can be intimidating, but these simple steps will help you through your first few years of investing.

Safeguard #6: Recognize And Avoid Financial Hooks
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To safeguard your money, you must be able to extricate yourself from any bad investment quickly. Of course, the companies that sell mistakes don’t want you to be able to do that, so they use financial hooks to hold your money captive.

Safeguard #5: Understand Your Investment Strategy
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You have a critical part to play in financial planning. Certain responsibilities cannot be delegated to others.

Safeguard #4: Buy Investments That Trend Upward
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Crazy volatile markets push people toward irrational investment schemes. Know how to avoid them in order to safeguard your money.

Safeguard #1: Do Not Allow Your Advisor to Have Custody of Your Investments
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I was recently asked if investors should trust their financial advisors. And my short answer, you may be surprised to hear, was no. Your financial advisor should not also have custody of your investments.

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