The February booklist is here!

If you missed our latest booklist of new investment/retirement planning books purchased with our Smart Investing @ Your Library grant, you can find it here!  Previous lists are available on our Resources page.  Don’t invest in what you don’t understand!

February meeting: Asset Allocation

At our February meeting last week  guest speaker Larry Kirsch spoke about “Asset Allocation for (not so) Dummies.”   While not everyone may agree with Larry’s approach to investing, which relies on technical analysis, it was a very interesting presentation which gave us lots of food for thought, and plenty of new suggestions of resources and tools to investigate.  In addition, reporter Rebecca Sheir was on hand to interview Club members and record the meeting for use in an upcoming NPR (National Public Radio) story (stay tuned!).

The tag line for Larry’s talk was that “increasing wealth is all about managing risk.”

In part one he focused on three myths, from his point of view:

1. Stocks always rise in the long term.
2. Buy and hold stocks, because you can’t time the market.
3. Increased risk means increased returns.

He then gave examples of why these are not always the case.

In part two he discussed the “not so” secrets of risk management:  asset allocation and market timing.  By “market timing” he did not mean predicting the markets, but rather, looking at where the market has been and where it is now–i.e., trend following.  He discussed the theory of assembling a portfolio of various assets with (preferably) reduced correlation, and then looking at the trends of these assets over time to decide when to buy and when to sell.  He likes to graph the 200 day moving average of an asset, and chooses to sell when the asset price is less than than the 200 day moving average, and buy when it is higher.

For all the details, you can download Larry’s full PowerPoint presentation.

Resources mentioned by Larry:

Yahoo! Finance has a huge amount of information available if you want to experiment with this technical analysis approach.  If you enter a ticker symbol or name in the search box at the top, you’ll get information and a stock price chart.  Then clicking on “Charts/Interactive” in the menu on the left lets you change the settings.  You can click on “Technical Indicators” at the top to change the period of time for the simple moving average (among other indicators), and vary the time period with the tabs at the bottom.  And lots more!  You may be prompted to sign up for a Yahoo! account if you use the site a lot, but this is free.

For a different approach, the Wall Street Journal’s MarketWatch has a site listing eight Lazy Portfolios — simple portfolios with no market timing, no active trading and no commissions.  For more on this approach, see The Lazy Person’s Guide to Investing: A book for Procrastinators, the Financially Challenged, and Everyone who Worries about  Dealing with Their Money, by Paul B. Farrell.

Correlation Tracker – By entering the stock symbol, this site allows you to plot the correlation of up to 4 symbols at a time.

The Black Swan: The Impact of the Highly Improbable, by Nassim Taleb.  Available in the Library’s collection in both print in audio CD.

Asset allocation ideas

Need help allocating your investments?  On Wednesday, February 18, from 7:00 – 8:30 p.m., guest speaker Larry Kirsch will give a presentation on asset allocation for investing, in the Newton Free Library’s Druker Auditorium.  This program is part of the Library’s Retirement Planning Club for Women, but the talk is free and open to all.

Educate yourself about investments!

If you haven’t had a chance to look at them yet, don’t forget the Investor Education information made available to the Retirement Planning Club by FINRA.  Their investor education content is divided into 12 sections or “modules,” so you can focus on the information you need most.   Whether you need to understand basic investment concepts, how to choose investments based on your goals or age, how to manage risk, evaluate performance, or find investment professionals, there’s something here for everyone!

Changes to Massachusetts probate law

News from the Massachusetts Trial Court Law Libraries:

In January, Massachusetts adopted the Uniform Probate Code, St.2008, c.521, resulting in major changes to current probate laws.  According to the Massachusetts Bar Association,

“The reforms increase uniformity with other states, add protections for those under guardianship and the beneficiaries of trusts, eases the administration of probate matters for judges and court personnel and reduce delays for citizens. Among the changes are:

• Mandating courts to monitor guardianships and requiring guardians to issue annual reports.
• Shorten to seven days after the date of death (from as long as five months) the length of time it takes to appoint an estate administrator
• In the case of no will, the spouse gets the entire estate if the children are all of the marriage.
• Trustees will be required to notify beneficiaries of accountings and acceptance of appointment.”

Some changes are effective July 1, 2009, but most do not take effect until July 1, 2011. 

The Massachusetts Trial Court Law Libraries has links to this and other probate laws on their website under Mass. Law About Wills and Estates.

“Green” and Socially Responsible Investing

What exactly is meant by “green” or “socially responsible” investing?  Can you invest based on your social beliefs and still make money?  For a concise discussion and some of the pros and cons, see Morningstar’s newest booklet, The Morningstar Guide to “Green” and Socially Responsible Investing.

Books for mutual fund information

In her presentation on mutual funds at our January meeting, Carole mentioned several books on mutual funds and related topics.  Here’s the full list!