Huxley Burns Asset Dedication How To Grow Wealthy With The Next Generation Of Asset Allocation

The first book to close the perilous gaps in—and enhance the performance of—asset allocation Asset allocation is one of today’s bestknown investment approaches. Problem is, its major precept—that a magic-number, fixed-percentage asset mix will provide superior results for investors who have dramatically different goals and needs—is scientifically unproven and fundamentally flawed. Asset Dedication updates the asset allocation model, outlining a seven-step process designed to more effectively meet the real needs of real investors. Showing investors how to design low-risk portfolios that more accurately and successfully dedicate assets, this breakthrough book helps investors fill in the gaps inherent to asset allocation by demonstrating: Techniques for ascertaining the best asset mix by determining individual needs and goals How asset dedication provides superior protection against inflation and market risk Investing strategies for the three investment life phases—accumulation, distribution, and transfer

The breakthrough technique that outperforms asset allocation—and takes your portfolio to the next level

Over the past two decades, asset allocation has become the holy grail of investment techniques. Experts championed it, brokers and financial planners sold it, clients bought it, and few questioned the wisdom of trying to squeeze widely varying investors and their financial goals into prefabricated "one size fits all" allocation formulas.

Problem is, asset allocation has significant flaws in the way it is used today, especially for personal investors. Asset Dedication exposes these flaws, corrects them, and propels investors and advisors into the next generation of personal investing. This revolutionary book introduces asset dedication, an investment program based on the latest techniques in modern financial management technology that will allow you to:

• Improve a portfolio's performance by constructing a seven-step, personalized asset dedication program
• Design financial strategies tailored to fit the three investing phases of life—accumulation, distribution, and transfer
• Build a flexible but passive set-it-and-forget-it portfolio that matches or exceeds actively managed portfolios without high fees and "loads"

The time is long past for the shortcomings of asset allocation to be revealed and repaired. Asset Dedication shows how to build a personalized portfolio, one that has been proven through extensive backtesting to consistently outperform asset allocation and meet your financial wants and needs over both the short- and long-term.

"New ideas often take a long time to replace old ideas. The purpose of this book is to introduce a new idea: asset dedication. It is a strategy that works. The evidence is here."—From Chapter 1

To anyone who has taken the time to look, it has become clear that asset allocation has severe drawbacks. Chief among those is the focus on applying static, set-in-stone formulas to a narrow range of "model" portfolios and forcing a wide range of investors to follow them. This may help brokers to quickly pigeonhole investors into pre-set allocation models with their generic, impersonal formulas, but fails to provide truly customized portfolios. Meeting the widely varying needs, resources, and goals of individual investors precisely and safely is exactly where asset allocation falls short, and reveals its own fundamental flaws.

Asset Dedication breaks the monopoly that asset allocation has held over individual investors. It provides a rationale for why each dollar is invested in stocks, bonds, or cash and how to dedicate the precise amount in each asset class to do the job it does best—no more, no less:

• Just enough cash to meet emergency needs
• Just enough in bonds to provide sufficient and steady income
• Everything else in stocks for long-term growth

Asset dedication represents the first major shift in investment strategy since the popularization of asset allocation in the 1980s. Historical comparisons show that it achieves better performance than the traditional and often arbitrary fixed-formula asset allocation approach.

Asset allocation is about to replaced by a new technique that promises to shift the ways in which investors at every level, especially retirees, approach their investment decisions. Asset Dedication introduces you to this focused new approach, shows how to break the stranglehold that asset allocation holds on your portfolio, and helps you, once and for all, to become the master of your current and future financial success.

Stephen J. Huxley, Ph.D., and J. Brent Burns

(San Francisco, CA) are founding partners

of Asset Dedication, L.L.C. Dr. Huxley, a

registered investment adviser, is a professor

of decision sciences at the University of

San Francisco.

Asset allocation is one of the fundamental investing topics that everyone hears about, few really understand, and even fewer actually implement with long-term success. Typically explained as the percentage of investments that should be in stocks, fixed income securities, and cash, asset allocation has been simplified to such a degree as to be of little real use for investors. This fixed-formula approach - practiced by a majority of brokers and financial planners - is fundamentally flawed. No one has been able to find a scientifically valid method to determine the best asset allocation for any given investor. A new approach is needed - and Asset Dedication provides that approach.; Taken from the concept of dedicated portfolios (long used by corporations and institutional investing), asset dedication helps investors determine the best asset mix for them by dedicating investments for particular needs and goals. Asset Dedication takes the concept of asset allocation to the next level, breaking the monopoly that asset allocation has had on individual investors. The focus is not on a magic number or fixed formula that determines allocation. Rather, each piece of the investing pie (stocks, bonds, cash) is dedicated to specific purposes: Cash is dedicated to serving emergency needs; Bonds are dedicated to providing regular income over time; Stocks are dedicated to growth over time; How does this book differ from titles on asset allocation? Asset dedication promises to become the first major shift in investment strategy since the advent of asset allocation in the 1980s.; Instead of basing its rationale on percentage allocation approach (such as 60-30-10 in stocks, bonds, and cash), asset dedication designs low risk portfolios to meet specific income and growth goals. By focusing on cash flow needs and cutting risks, it also addresses the problems typically faced by retirees in the distribution phase of their financial lifetimes. Bernstein (The Intelligent Asset Allocator and The Four Pillars of Investing) touches on this, but only briefly. Authors Huxley and Burns explain the differences between asset allocation and asset dedication in plain English, using dozens of charts and tables to illustrate results. Back-tested over several 10-year time periods, asset dedication has been revealed to garner superior performance. It closes the gaps in asset allocation theory. With a step-by-step blueprint, Asset Dedication gives investors a new alternative to traditional asset allocation as the cornerstone of their investment strategies CONTENTS......Page 9 PREFACE......Page 11 ACKNOWLEDGMENTS......Page 15 PART 1 Asset Dedication— The Next Step in Asset Allocation......Page 19 CHAPTER 1 Asset Allocation— the Dominant but Procrustean Paradigm......Page 23 CHAPTER 2 Asset Allocation: The Gaps......Page 38 CHAPTER 3 Asset Dedication— How It Works......Page 51 CHAPTER 4 Asset Dedication versus Asset Allocation: Historical Comparisons from 1926......Page 81 PART 2 Dedicating Assets before and after Retirement......Page 111 CHAPTER 5 Calculating Your Financial Independence......Page 113 CHAPTER 6 Finding Your Critical Path......Page 133 CHAPTER 7 The Distribution Phase: Dedicating Assets to Do Their Job......Page 156 CHAPTER 8 Building an Asset Dedicated Portfolio: Doing It Yourself on the Internet......Page 173 CHAPTER 9 Using Asset Dedication for More than Steady Retirement Income......Page 193 PART 3 Theoretical Underpinnings of Asset Dedication: A Few Fundamentals......Page 215 CHAPTER 10 Life, Death, Economics, and Time......Page 217 CHAPTER 11 A Few Investment Fundamentals......Page 230 CHAPTER 12 Understandingthe Numbers......Page 250 CHAPTER 13 Portfolio Management Tools......Page 269 CHAPTER 14 Forecasting: The Good, the Bad, and the Ugly......Page 280 APPENDIX1 Long-Term Bond Ratings......Page 307 APPENDIX 2 The Safety of Bonds Based on Historical Default Rates......Page 309 APPENDIX 3 Historical Comparisons by Decade—Middle Period (1947–1984)......Page 315 APPENDIX 4 Historical Comparisons by Decade—Earliest Period (1926–1955)......Page 318 APPENDIX 5 IRS Rules and Regulations on Individual Retirement Accounts (IRAs)......Page 321 INDEX......Page 325 The first book to close the perilous gaps in—and enhance the performance of—asset allocationAsset allocation is one of today's best known investment approaches. Problem is, its major precept—that a magic-number, fixed-percentage asset mix will provide superior results for investors who have dramatically different goals and needs—is scientifically unproven and fundamentally flawed.Asset Dedication updates the asset allocation model, outlining a seven-step process designed to more effectively meet the real needs of real investors. Showing investors how to design low-risk portfolios that more accurately and successfully dedicate assets, this breakthrough book helps investors fill in the gaps inherent to asset allocation by demonstrating:Techniques for ascertaining the best asset mix by determining individual needs and goalsHow asset dedication provides superior protection against inflation and market riskInvesting strategies for the three investment life phases—accumulation, distribution, and transfer Google Your Way to the Top of Your Industry! 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