Asset Allocation for Dummies

Happy Birthday, DummiesNo, I don’t mean you—I mean the book. May 2018 marks the ninth anniversary of Asset Allocation For Dummies. I’ll send you a copy of AAFD if you tell me you’ll even think about using asset allocation to improve your portfolio in 2018.

For many of us, “asset allocation” translates to “risk,” meaning, “I’ll lose money.” In May 2009, when AAFD published, Jerry and I couldn’t convince readers about asset allocation, which is the one thing you can do to improve your portfolio’s returns. Yes, I can hear you laughing all the way from California and Florida and Vermont to New Jersey: May 2009, the bottom of the financial meltdown. As long as you’re laughing, let me ask you a question about another equally unpopular investing basic:

Have you rebalanced your portfolio this year? I know is rebalancing is hard to do, because it just doesn’t seem to make sense, to sell when the financial markets are rising, and buy when they’re low.  Are you, in fact, one of the nearly three in every 10 of us approaching retirement who have never—or can’t remember when—they last rebalanced their portfolio? I’ll send you a copy of the book, if you’ll tell me why.

Still not convinced? Read what these two reviewers—one a GenXer and the second a noted personal finance columnist—had to say when they read Asset Allocation:

Amazon.com: “Great Book to Demystify Asset Allocation”

“I was reading Asset Allocation For Dummies on the subway recently and a man leaned over and whispered in my ear, “Well, the current economic drawback has proven that asset allocation doesn’t work anymore.”

Actually, it’s quite the contrary. Because of the current downturn and ongoing volatility, proper asset allocation is needed more than ever. Many people confuse asset allocation with just the stock market and stock picking. The fact is, you have to put your money somewhere, and active and knowledgeable asset allocation is the only way to protect yourself.” – Amy Z. Burchenal, Brooklyn, NY

Amy happens to be a good friend of my brother, John. Other than that important fact, she manages her family’s finances and reads financial books (even on the New York City subway!), which may surprise those who would expect an artist and photographer not to care about money.

The Washington Post: “The Ins and Outs of Asset Allocation”

Michelle Singletary, The Washington Post’s personal finance columnist, selected Asset Allocation For Dummies as her book of the month when AAFD published. She also hosted my co-author and me for an hour-long webcast, and we answered questions from callers. Read the review here.

Which brings us to another equally unpopular topic: Did you rebalance your portfolio in January—or at any time this year? Rebalancing is tough to do, because it’s counterintuitive: Sell when investments rise, and buy when the financial markets are low.

Are you one of the nearly three in every 10 of us approaching retirement who have never—or can’t remember when—they rebalanced their portfolio? I’ll send you a copy of the book, if you’ll tell me why.