Smarter Investing

Tim Hale has spent over 15 years in the active investment management world, working in London, New York, Hong Kong and Tokyo. Currently he leads his firm Albion Strategic Consulting, in providing consulting and investment training to the investment and wealth management industry, which he set up in 2001 after working at Chase Asset Management (now part of JP Morgan), in both sales and strategy roles. This experience has provided a unique insight into the struggles that most investors face, an inside view of good and bad practices of the industry and a determination to share this knowledge through his consulting and training business, and this book. Tim holds an MBA from Cranfield School of Management and an Honours degree from Oxford University. He lives in Devon with his wife and two young daughters, writes articles on investing for fun and disappears regularly to work with his clients in the US and the UK.

Preface

Publisher's acknowledgements

Author's acknowledgements

Foreword

Introduction

I.1 What should I do with my money?

I.2 Some eye-openers to get you thinking.

I.3 How this book will help you

I.4 How this book works

I.5 A few points to note

Part 1: Smarter investing basics

Chapter 1: Simplifying the confusion

1.1 Choices, choices, choices

1.2 How did we get here?

1.3 Battling for investors' money

1.4 Reducing confusion and complexity

Chapter 2: Covering the basics

2.1 What is smarter investing?

2.2 Ten points of focus for smarter investors

2.3 The two distinct phases of investing

2.4 There are no perfect answers

2.5 Summary: smarter investing basics

Chapter 3: It only takes a minute

3.1 Twenty tips for smarter investing

Part 2: Smarter thinking

Chapter 4: Get smart - find your philosophy

4.1 Don't be a loser

4.2 The foundations of your philosophy

4.3 The path to establishing your philosophy

4.4 Can active managers win?

4.5 Do a few managers outperform over time?

4.6 Can you identify them in advance?

4.7 Don't just take my word for it

4.8 Summarising what you now know

4.9 A personal philosophy

4.10 Your investment philosophy rules

Chapter 5: Get smart manage your emotions

5.1 You are your own worst enemy

5.2 Challenges to decision-making

5.3 Thirteen questions for you to answer

5.4 Ms. Rational versus Mr. Irrational

5.5 Wise words to leave you with

5.6 Behavioural rules and tips

Part 3: Building smarter portfolios

Chapter 6: Understanding your emotional risk tolerance

6.1 What is your risk profile?

6.2 Why is it so important?

6.3 Exploring your risk profile

6.4 The process from here

Chapter 7: Sorting out your goals

7.1 Well thought-out goals underpin success

7.2 Five steps in defining your goals

7.3 Basic financial survival goals

7.4 A working example

7.5 Useful calculations

7.6 Summary: investment goals

Chapter 8: Smarter risk taking

8.1 2008 a violent introduction to risks

8.2 The cost of capital

8.3 Focusing on market risk

8.4 The risks and rewards of being a lender

8.5 The risks and rewards of being an owner

8.6 Therefore, risk choices are fortunately limited

Chapter 9: Smarter portfolio construction

9.1 The portfolio building process

9.2 Construction goals and approach

9.3 Deciding on the asset class menu

9.4 Ground rules for the growth portfolio

9.5 Building your growth-oriented portfolio return engine

9.6 Building a robust defensive asset mix

9.7 Portfolios along the risk spectrum

Chapter 10: Smarter portfolio choice

10.1 Understanding and using the matrix

10.2 Smarter Portfolio insights

Chapter 11: An insight into key asset classes

11.1 The thrills and spills of equities

11.2 Voting machine v. weighing machine

11.3 An insight into equity market returns

11.4 Developed equity market returns

11.5 Emerging market equities

11.6 Value (less financially healthy) companies

11.7 Smaller companies

11.8 In summary equity asset classes

11.9 Commercial property a diversifier

11.10 Commodity futures a bit esoteric

11.11 Defensive assets

11.12 Key asset classes excluded

11.13 Summary of asset class assumptions

Part 4: Smarter implementation

Chapter 12: Hire an advisor or do it yourself

12.1 Hiring an advisor

12.2 What attributes will a leading advisor have?

12.3 Checklist for finding a leading wealth advisory firm

12.4 The do-it-yourself option

12.5 Don't forget about tax

Chapter 13: Smarter product choices

13.1 The serendipity of index-fund investing

13.2 Choosing your market index

13.3 Product structures

13.4 Selecting the best passively managed index funds and ETFs

13.5 Passive providers

13.6 A possible shortlist caveat emptor!

13.7 Using active funds (if you must)

Chapter 14: Costs what a drag

14.1 Why do we throw our money away?

14.2 More than just management fees

14.3 Summary: costs what a drag

Chapter 15: Standing firm on index funds

15.1 Common put-downs

15.2 Bond investing: active or index?

15.3 Summary: favour index strategies

15.4 What about future equity returns?

15.5 Summary: the thrills and spills of equities

Conclusion

Bibliography

Websites

Insightful books

Data-oriented books

Asset allocation software

Additional sources

Appendix

Index