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Invest Like an Institution: Professional Strategies for Funding a Successful Retirement

Invest Like an Institution: Professional Strategies for Funding a Successful Retirement

by Michael C. Schlachter
Publisher: Apress
Release Date: August 2013
ISBN: 9781430250593
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Book Description

All too often, when investors go in search of investment advice, they are met with television personalities and so-called investment "gurus" who do little more than push the latest and greatest scheme to retire rich. Your retirement funds—in the form of IRAs, 401(k)s, SEP or Simple IRAs, and other plans you can direct to some degree—are, however, far too precious to bet on the latest scheme, trend, or tip you heard at a party. In Invest Like an Institution: Professional Strategies for Funding a Successful Retirement, Michael Schlachter provides individual investors with the tools they need to build a portfolio that not only protects their wealth but helps it grow for the long term. Result? A comfortable retirement in which you can pursue your dreams and check "bucket list" items off at your leisure.

As an advisor to large pension funds and endowments, Michael Schlachter counts among his clients the elite. Institutional investors like the retirement systems of states and major companies, as well as the largest university endowments, are among the few that consistently outperform the market. Sure, average retail investors can't make the same types of private deals in real estate, private equity, or hedge funds that institutional investors use to reap large returns or offset market volatility. But as this book demonstrates, you can replicate in your own portfolio the very same diversification strategies that large funds employ to achieve long-term gains. To that end, Invest Like an Institution shows how to build a portfolio that is every bit as diversified and risk-controlled as a multi-billion-dollar institutional fund—and a portfolio more likely to result in a happy, financially secure retirement.

Filled with easy-to-implement guidelines that will put you on the path to financial success without encouraging you to chase trends, take on unneeded risks, or spend unnecessary fees, Invest Like an Institution analyzes:

  • Why asset allocation and consistent retirement contributions are the single largest determinant of your success or failure

  • The merits of a global portfolio versus those of a home country–biased portfolio

  • How newer investment strategies are used by institutional investors to supplement a well-diversified portfolio

  • Why fixed income investments are not as safe as most investors think and how to understand their role in your portfolio

  • The best alternative asset classes that are readily available to individual investors

    • Invest Like an Institution will help ensure that your investments are positioned for long-term growth under any market conditions. Follow its advice, and you can better achieve a prime goal we all share: retiring with a substantial nest egg.

    What you'll learn

    Readers of this book will learn:

  • How to keep your wealth intact and grow it in a risk-controlled manner over an extended period of time.

  • How to implement the investment and asset allocation strategies used by the largest and most successful institutional investors into your own portfolio.

  • The unique advantages that individual investors have over institutional investors—and how to leverage those advantages to your benefit.

  • How to diversify your assets like the big funds do, no matter whether you are a young investor or are getting a late start on saving for retirement.

  • The best diversification strategies for structuring your investments in both stocks and bonds.

  • How alternative asset classes can enhance their returns while minimizing their risk.

    • Who this book is for

    Designed specifically for the individual investor, Invest Like an Institution will appeal to active investors and savers of all ages, from Baby Boomers who are closing in on retirement to young adults who are struggling to determine the proper way to manage their IRAs and 401(k)s and direct their asset allocation mix.

    Table of Contents

    1. Title Page
    2. Apress Business: The Unbiased Source of Business Information
    3. Dedication
    4. Contents
    5. Foreword
    6. About the Author
    7. Acknowledgments
    8. Introduction
    9. CHAPTER 1: How You Compare to the Big Funds
      1. Advantages of the Individual Investor
      2. Disadvantages of the Individual Investor
      3. Summary
    10. CHAPTER 2: Asset Allocation
      1. Example: Three Individuals and Their Differing Asset Allocations
      2. Asset Allocation and You
      3. Be a Long-Term Investor
      4. Is a Three to Five Year Review Cycle for Asset Allocation Always Appropriate?
      5. How Early You Start Determines How Much Your Assets Can Grow
      6. What on Earth Does This Have to Do with Pension Plans?
      7. When Good Plans Go Bad
      8. Two Different Approaches Toward Benefit Levels Results in Very Different Financial Situations
      9. Dollar Cost Averaging
      10. Picking Your Asset Allocation
      11. Summary
    11. CHAPTER 3: Investment Structure for Stocks, Part I
      1. Active versus Passive Investing
      2. Value versus Growth Investing
      3. Large and Small Capitalization Investing
      4. Middle Capitalization Investing (Mid Cap Stocks)
      5. Summary
    12. CHAPTER 4: Investment Structure for Stocks, Part II
      1. Global Portfolio versus Home Country Bias
      2. Other Types of Active and Quasi-Passive Equity Investment Management
      3. Summary
    13. CHAPTER 5: Investment Structure for Fixed Income, Part I
      1. Duration
      2. Credit Risk
      3. Summary
    14. CHAPTER 6: Investment Structure for Fixed Income, Part II
      1. Active versus Passive Management
      2. “Plus” Sectors
      3. Should an Individual Invest in the US or Global Fixed Income Market?
      4. Summary
    15. CHAPTER 7: Investment Manager Selection
      1. The Blessed Money Manager
      2. The Forlorn Money Manager
      3. The Insufferable Money Manager
      4. The Unemployed Money Manager
      5. Applying Manager Performance to Your Investments
      6. Endpoint Bias Case Study
      7. Peer Comparisons
      8. The Secret to Selecting Managers for your Money
      9. Summary
    16. CHAPTER 8: Alternative Asset Classes
      1. What Are “Alternatives”?
      2. Private Equity
      3. Real Estate
      4. Hedge Funds
      5. Commodities
      6. Fees
      7. Summary
    17. CHAPTER 9: Fees and Expenses
      1. Planners vs. Brokers
      2. Are All Fees Bad?
      3. Summary
    18. CHAPTER 10: Risk Management
      1. For Most Investors, Diversification is a Must
      2. Beware of False Diversification
      3. The New Way to Manage Asset Class Risk
      4. Other Risks to Avoid
      5. Getting Scared
      6. Changing Retirement Goals at the Top
      7. Summary
    19. CHAPTER 11: Putting It All Together
    20. Index