INVESTING WISELY IT IS EASIER THAN YOU THINK

by George Dagnino

Investing Wisely It Is Easier Than You Think is the outcome of my search on how to invest money, how to manage a portfolio. It took me more than 40 years of studying, investing, and making mistakes sprinkled with successes. My first book - Profiting in Bull or Bear Markets – presented in great details how business growth (the business cycle) impacts the way we behave - from business decision makers to investors. My focus was to show how economic growth has a major influence on the main trends of various markets such as commodities, inflation, interest rates, and the stock market. It provides the main reason why momentum-based strategies work. My second book - Easy Ways to Beat the Market with ETFs – is an attempt to make the investment process rational and at the same time eliminate the negative bias caused by the emotional aspect of a typical investor. It is a study of the major asset classes as represented by ETFs. The book is intended for the general audience, but shows the performance (return, compound annual growth rate, and drawdowns) of many ETF portfolios which have outperformed the market (S&P 500). These two books showed me I was on the right track. So, I decided to extend the research to broader based portfolios not only chosen from the ETF universe, but also from mutual funds and stocks. This is the main content of this book. I used the lessons learned from the previous two books to select the portfolios I believed would have performed well. They did. They all outperformed the S&P 500. The following pages will show you many portfolios which have been backtested through many market cycles. They all are simple portfolios, with very few investments. This lesson confirmed what was discussed in the second book - the wider the choice of investment the more likely the portfolio was to underperform the market (S&P 500). The other reason to make the portfolio as simple as possible was to make it accessible to all investors. This work has convinced me that once you put in a computer your analysis and the rules to manage your money, you have to trust the outcome. The results should convince you to follow the rules you entered into the computer and ignore the emotional aspect of investing. The outcome of the tests we made on all portfolios provides $10,000 total return over the tested period, the compound annual growth rates, the volatility of the return (standard deviation), annual returns and maximum losses. These data, when compared to those of the S&P 500 convinced me it was time for me to ignore my emotions and the pronouncements of the analysts parading on the major TV business channels. The purpose of this book is to simply show how easy investment strategies have survived the test of time using extensive backtesting. Will these strategies continue to perform as they did in the past? No one can answer this question with absolute certainty. These models only want to provide a blueprint with the information necessary on the type of investment results that can be achieved using easy-to-follow rules. The author, George Dagnino, Ph.D. is the former Chief Economist and Risk Manager for a major corporation where he managed $4 billion of interest rates and currency hedge portfolios. The Economist Intelligence Unit (London) – a publication of the prestigious The Economist – wrote an article about his unique and successful approach to managing risk using derivatives. Dr. Dagnino is the editor of The Peter Dag Portfolio since 1977, available on www.peterdag.com.

Kindle Edition

Published November 8, 2018