The Investor’s Guide to Active Asset Allocation offers you the background and analytical tools required to take full advantage of the opportunities found in asset allocation, sector rotation, ETFs, and the business cycle.
Introduction:
There are three reasons why it makes sense to allocate assets. First, it is a wellknown investment principle that risk is reduced when a portfolio is diversified into several different entities. It comes down to the simple idea that if you own one stock and the company goes bankrupt, you have lost your entire portfolio.
On the other hand, if you own eight stocks and one goes bankrupt, the portfolio is hurt, but not mortally. The second justification for allocation is to take advantage of times when an asset is attractive and to avoid that same asset class when it is not. Finally, the key to successful investing is as much about dealing with yourself and remaining objective as it is about attaining knowledge.
Gradually and carefully shifting emphasis from one asset to another will really help to reduce the emotional aspect of decision making. Our seasonal approach and the framework it provides will give you the confidence of understanding where you are in the cycle and what conditions should be expected. The rotation and balancing of assets should become a much more understandable process from which it is possible to gain a high degree of confidence.
Contents:
- Some Basic Principles of Money Managements
- The Business Cycle: Nothing More than a Seasonal Calendar
- Useful Tools to Help Us Identify Trend Reversals
- Putting Things into a Long-Term Perspective
- How the Business Cycle Drives the Prices of Bonds, Stocks, and Commodities
- Say Hello to the Martin Pring’s Six Business Cycle Stages
- How to Recognize the Stages Using Models
- Identifying the Stages Using Market Action
- How the Stages Can Be Recognized Using Easy-to-Follow Indicators
- If You Can Manage the Risks, the Profits Will Take Care of Themselves
- How the 10 Market Sectors Fit into the Rotation Process
- Sector Performance through the Six Stages
- What Are Exchange Traded Funds? What Are Their Advantages?
- How to Use ETFs in the Sector Rotation Process
- ETFs and Other Vehicles as Hedges against Inflation and Deflation
- Putting It All Together: Suggested Portfolios for Each Stage in the Cycle
The Investor's Guide to Active Asset Allocation: Using Technical Analysis and ETFs to Trade the Markets By Martin J. Pring pdf
