The Flexible Investing Playbook: Asset Allocation Strategies for Long-Term Success

227 Pages·2010·2.47 MB·English

by  Robert Isbitts

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The Flexible
Investing Playbook
ASSET ALLOCATION STRATEGIES FOR
LONG-TERM SUCCESS
Robert A. Isbitts
John Wiley & Sons, Inc.
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Copyright#2010byRobertA.Isbitts.Allrightsreserved.
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LibraryofCongressCataloging-in-PublicationData:
Isbitts,RobertA.
Theflexibleinvestingplaybook:assetallocationstrategiesforlong-termsuccess/
RobertA.Isbitts.
p.cm.
Includesindex.
ISBN978-0-470-63616-9(cloth);978-0-470-87556-8(ebk);978-0-470-87555-1(ebk)
1. Investments. 2. Securities. 3. Finance,Personal. I. Title.
HG4521.I832010
332.6—dc22
2010008454
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
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ToDana,Jordann,Tyler,andMorganIsbitts.
EverythingIdo,Idoforyou.
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Contents
Acknowledgments vii
Introduction ReplacingYourOldInvestmentPlaybook ix
Part I Setting the Stage to Be Reeducated
Chapter 1 Tired...butNotRetired 3
Chapter 2 2008:WhattheHellHappened?! 11
Chapter 3 WhatHaveWeLearned? 27
Part II Getting Old Ideas Out of Your Head
Chapter 4 IdentifyingtheIssuesandtheEnemy 55
Chapter 5 WallStreet’sBull 77
Part III Investing in the Twenty-First Century
Chapter 6 KeystoSuccessfulAssetAllocation 95
Chapter 7 HybridInvesting 133
Chapter 8 ConcentratedEquityInvesting 151
Chapter 9 GlobalCycleInvesting 161
v
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vi Contents
Part IV You’ve Come This Far, Now Score!
(Putting the Strategy to Work)
Chapter 10 EvaluatingYourPerformance—the
RightWay 177
Chapter 11 PuttingItAllTogether 191
AbouttheAuthor 206
Index 208
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Acknowledgments
T
here are so many people who have influenced the thoughts and
opinions that led to the creation of this book. First, there are the
investors and financial advisors who had the courage to be early
adopters of my investment philosophy. Now that this genre of
investing has matured from a set of basic ideas into a formalized,
sustainable,investmentprocess, thosewhohavecomealongforthe
ride have been rewarded for their patience.
The mutual fund managers whose investment styles piqued my
curiosity starting in the mid-1990s were the true inspiration for this
book. Just as a good team coach needs to effectively use his players
and put them in positions to help the team win, so it is with the
outstanding and innovative fund managers I have had the pleasure
to spend time with over the years. They do the day-to-day security
selection, and I use my strategic approach to determine how to set
andmaintaintheteam’s‘‘lineup.’’Mutualfundshavebeenaround
since1924andIdon’tseethemgoingawayanytimesoon.Thus,Iam
excitedabouttheprospectoffindingadditionalfundstoblendinto
the portfolios for the next many years.
My parents, Joyce and Carl Isbitts, are the ones who instilled
in me the discipline, energy, and persistence to make the concept
of Flexible Investing a reality. I owe my inner strength to them.
My brother Mark and his family, while many miles away, have
been a constant reminder that one’s support network and family
bond is more important than any financial victory or defeat.
My in-laws, Max and Vicki Rosen, transcend (nearly) every
stereotype about ‘‘in-laws.’’ They have been among my biggest
fans, and they have completed the family picture that provides
the backbone for all great ideas.
My aunt and uncle, Myrna and Paul Fruitt, and cousins Lisa
Fruitt, Gary Markowitz, and Sid Krex have taught me so much and
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viii Acknowledgments
have been longtime supporters of the goals and dreams that are
described in this book. I can truly say that when it comes to family,
I don’t have quantity, but boy do I have quality!
John Lohr, my mentor in the writing business, shares the acco-
ladesforthisbook.Myfirstbook,WallStreet’sBullandHowtoBearIt
was published by John’s publishing company, Isle Press in 2006.
Before and since that time, John’s perspective on the investment
management business has been both thought-stimulating and very
enjoyable. He is one of the unsung heroes of fair play in the
investment business, and I am grateful for having the opportunity
to know him.
Mycareerhas hadnumeroustwistsand turnsandat eachbend,
I accumulated some knowledge and relationships that allowed me
to eventually put together the ‘‘playbook’’ you are now reading.
People like Donna Naitove, Scot Hunter, Allan Budelman, Medon
Michaelides, Denise Karp, Pamela Nelson, and Leana Alu have all
played a role in moving the process forward. In particular, I wish to
thank those who have gone to battle alongside me in the day-to-day
efforttouncoverinvestmentideasandanalyzetheirpotential:Keith
Stoloff, Michael Kahn, Suzie Dean, and Matthew MacEachern.
And most significantly, my wife Dana, and our three fantastic
children have been the meaning behind everything I do. As any
parent will tell you, one reaches a certain point in life where as
much as you enjoy your professional accomplishments and free
time, it just means more when you have your family there to share
the joy with you. There is no shortage of that in our family, and I
could not ask for anything more than I have at home. As a country
song says, ‘‘the view I love the most is my front porch looking in.’’