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Simple 4 x 4 approach to investing
Robert T 04-12-2007, 6:48 AM | Post #198573 | 
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In the spirit of simplicity and Taylor's 'four' fund portfolio, here is a proposed 4 x 4 approach or focus to investing. IMO a focus on these four areas (and four sub-elements) should serve investors fairly well. It may be too complicated for some but I find it useful.

Focus on:

1. Structuring exposure to four risk factors:
(i) Market (vs fixed income)
(ii) Size
(iii) Value
(iv) Term (fixed income maturity)

2. Diversifying across four core asset classes:
(i) US equities
(ii) Non-US developed equities
(iii) Emerging market equities
(iv) US Treasuries

3. Minimizing four expenses:
(i) Fund expense ratio
(ii) Taxes
(iii) Trade costs
(iv) Bid-ask spreads

4. Monitoring four implementation indicators:
(i) Savings
(ii) Asset allocation (rebalancing)
(iii) Return relative to benchmarks
(iv) Asset value relative to value path to financial objectives

Robert

Originally posted in thread: 58568
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