Do Everything – Doing Nothing


A little over four years ago, I took a challenge to start the most boring investment course… perhaps in the world.

Borrowing, but safe and profitable.

The course is called the Purposeful Investing Course.  We call it Pi and it has proven what we thought…. boring, but good if safety and profit mean more to you than excitement.   Pi is a course about the value of investing in good value stock markets and then just do nothing.

A friend in the publishing business said, “Gary you are crazy.  Investors want action.”  I realized he was right but have stuck to my guns because this is how  I invest and that’s what I always have written about for over 50 years.

I write about what I am doing.

This type of investing does have some advocates who invest big money.

Warren Buffet of course is the ultimate value investor.

value investing

Steve Edmundson, the investment chief for the Nevada Public Employees’ Retirement System

A Wall Street Journal article “What does Nevada’s 35 billion fund manager do all day nothing?” (1) reviews the activity of Steve Edmundson, the investment chief for the Nevada Public Employees’ Retirement System who also invests billions doing nothing.

Edmundson is my kind of guy, really low key.  He manages tens of billions but works alone and often eats leftovers at his desk for lunch.

Yet his investments regularly earn more than pension funds that have hundreds of staff.

The article says:  He generally doesn’t work outside 8 am to 5 pm hours.  His daily trading strategy: Do as little as possible, usually nothing.  The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes.  Mr. Edmundson may make one change to the portfolio a year.

News doesn’t matter much.  Will the 2016 elections affect his portfolio?  “No.”  Oil prices?  “No.”  He follows Fed Chairwoman Janet Yellen, but “there’s a difference between watching and acting.”  Mr. Edmundson, 44 years old, has until recently been a pension-world outlier.  Other state retirement systems turned to complicated investments and costly money managers to try to outperform markets with algorithms and smarts.

His strategy is to keep costs low and not try beating markets, he says.  “We’re bare bones.”  From his one-story office building in Carson City, Mr. Edmundson commands funds whose returns over one-year, three-year, five-year and 10-year periods ending June 30 bested the nation’s largest public pension, the California Public Employees’ Retirement System, or Calpers, and deeply-staffed plans of many other states.

“Doing nothing is harder than it looks,” says Ken Lambert, Mr. Edmundson’s predecessor an only outside investment-strategy consultant.  Harder, he says, because of the restraint needed to practice inaction.

In fact “Do nothing value investing” has become a huge trend.   Another Wall Street Journal article:  “Making Billions With One Belief: The Markets Can’t Be Beat” (2) is about the mutual fund manager DFA.  They are rising quickly as one of the largest fund managers in the USA, moving from eighth largest to sixth largest last year.  Their strategy is also “do nothing”.  Well, they do something about nothing, but a lot of trading and market timing is not part of that something.

The article says:  Dimensional Fund Advisors LP, is drawing nearly $2 billion in net assets per month at a time when investors are fleeing many other firms.

DFA, whose founders and advisers include leading purveyors of efficient-market theory, is built on the bedrock belief that active management practiced by traditional stock pickers is futile, if not an absurdity.  DFA’s founders are pioneers of index funds.  But these men concluded long ago that investors who respected efficient markets could nevertheless achieve better returns than plain index funds deliver.

The Austin, Texas firm remains all but unknown to the general public, since its funds are available exclusively through financial advisers or to big institutions.  But the firm manages $445 billion and already holds at least 5% of the total shares outstanding of 545 U.S.-listed companies, it says.

As of Dec 31, 2019, Dimensional Fund Advisor had nearly $609 billion of assets under management. For the past three decades, the company is providing investment management strategies to its clients.

You and I cannot invest direct in DFA, but we can learn how to do something about nothing.

This is how I invest, slowly.  In 2019  I only made one addition and no liquidations in my Pi portfolio.  This has been typical, to do little for greater safety, higher returns and extra time for all in life I consider more important than messing around with short term stock market moves.

You can learn more about Pi below.  Even if you never join our course to learn about “Do nothing value investing,”  get on the band wagon somehow.  Again and again investors are proving that less is more when it comes to investing in value shares.

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to invest in each of the good value markets.

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

There is an iShares country ETF for almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy, diversified investing.

If you are not totally happy, simply let me know in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) www.wsj.com/articles/what-does-nevadas-35-billion-fund-manager-do-all-day-nothing-1476887420

(2) www.wsj.com/articles/making-billions-with-one-belief-the-markets-cant-be-beat-1476989975