The All-Season Investor: Successful Strategies for Every Stage in the Business Cycle

In The All-Season Investor, Martin J. Pring offers practical straightforward guidance to modern methods of asset allocation. This book explains why each stage in the business cycle–including recession–has its profitable investment strategy and provides various techniques for tracking the cycle in order to choose appropriate investments. A “must-have” for investors seeking guidance for the unknown changes ahead.

Introduction:

The cornerstone of any investment strategy is to maximize return while maintaining a tolerable risk. The process of allocating assets among several investment categories is a way of achieving this goal. The level of’ ‘tolerable” risk depends on an individual’s psychological makeup, financial position, and stage in life. Younger people can assume greater risks than someone who is retired; a highly paid executive will be less dependent on current portfolio income than will a disabled person on workmen’s compensation, and so forth.

Asset allocation can be handled in two steps. The first decision involves a general review of these financial, psychological, and life stage factors to determine overall investment goals. Is your goal current income, capital appreciation, or an acceptable balance? If you decide on capital appreciation, do you have the personality to ride out major declines in the market, or are you the kind of person who would be better off assuming less risk in order to sleep more peacefully? These are decisions that only you can make after careful consideration. Formulating decisions on these overall investment objectives is known as strategic asset allocation. It is a process that sets out the broad tone of your investment policy, and one that should be reviewed periodically as your status in life changes. Some guidance on these matters is presented in Chapter 12.

This book, however, is principally concerned with the next step, known as tactical asset allocation, in which the proportion of each asset category held in the portfolio is altered in response to changes in the business climate. For instance, a retired person may decide that his or her principal investment objectives are current income and safety. This would not preclude, but would definitely limit, the proportion of the portfolio exposed to the stock market. For this type of investor the range might be 10 to 25 percent. The tactical allocation process would determine whether the equity exposure fell closer to the 10 percent or 25 percent area.

Contents:

• Diversification: The Medicine for Sleepless Nights.
• Securities in the Asset Allocation Mix.
• Mutual Funds.
• The Power of Compounding.
• Manage Risk, and the Profits Take Care of Themselves.
• The Business Cycle and Asset Allocation.
• Tracking the Typical Cycle.
• Asset Allocation as the Cycle Unwinds.
• Tracking the Stages: Market Action.
• Tracking the Stages: Business Cycle Benchmarks.
• Gold and the Business Cycle.
• Allocating Assets for Your Personal Investment Objectives.

The All-Season Investor: Successful Strategies for Every Stage in the Business Cycle By Martin J. Pring pdf