The Idle Investor

Description

3 simple strategies to earn high returns and beat the professionalsWould you like to use a simple, low-risk investing system that beats market indexes and fund manager performance over the long term, but requires only a few minutes of your time each month? Does it sound like a lot of hard work? It’s not – even the laziest investor can achieve it.
The Idle Investor includes three straightforward DIY strategies for long-term investing. All you have to do is follow the simple rules. Each method requires only a limited amount of your time and they all make use of easily accessible, low-cost funds. The reasons why the strategies work and everything else you need to know to put them into practice is explained clearly, with numerous worked examples.
The three strategies are:
1. The Bone Idle Strategy: Part of your portfolio is allocated to shares and part is allocated to bonds, with adjustments only required twice a year. The rest of the time you do nothing.
2. The Summer Hibernation Strategy: For part of the year your portfolio is allocated to shares and for part of the year it is allocated to bonds. Once again, adjustments to the portfolio are only required twice per year. The rest of the time you do nothing.
3. Multi-Asset Trending Strategy: A simple trend-following method determines whether to hold your portfolio in shares or bonds. For this strategy you will need to check your investments and make adjustments once a month.
Even on the very few occasions each year when action is required – twice a year for strategies 1 and 2, and once a month for strategy 3 – you’ll only spend a few minutes checking your portfolio and making simple changes. The activity levels range from yearly rebalancing, for the laziest investor, through to monthly reallocation, for those who are more active. How much you do depends on how lazy you are feeling.
Testing the three Idle Investor strategies for the period 1990 to 2012 resulted in average annual returns of up to 28%. Compare this to a buy-and-hold approach of investing in UK shares, which would have delivered 8.5% per year over the same period, and you can see that being idle doesn’t mean being unsuccessful!
If you are looking for a straightforward investing method that lets you get on with your life while your money grows in the background, then become an Idle Investor.

Edmund Shing is a Global Equity portfolio manager at BCS Asset Management, focusing on a combination of high-level investment themes and fundamental stock-picking.
Edmund has previously worked at Barclays Capital (as Head of European Equity Strategy), BNP Paribas (as a Prop Trader), Julius Baer, Schroders and Goldman Sachs over a 19-year career in financial markets based in Paris and London.
He also holds a PhD in Artificial Intelligence from the University of Birmingham.
You can follow him on Twitter @TheIdleInvestor and his website – featuring regular market commentary and investing thoughts – can be found at www.idleinvestor.com.

“As someone naturally curious about financial markets and investing, I read The Idle Investor with interest. Shing has done an excellent job of translating bold, theoretical approaches to portfolio construction into strategies easily understood by the personal investor.” —Cameron Ho, Fidelity Personal Investing
“A fascinating book” —Dan Coatsworth, Editor, Shares magazine
“What should be praised about this book is that Edmund has the ability to express very difficult concepts to the layman in plain and simple English. For someone steeped in academia and quant finance this is an exceptional skill to have developed, and a credit to the years heâ??s spent getting his message across through writing and broadcasting. The Idle Investor could act as a refresher for seasoned investors, or a working template to novice passive investors. It’s a brief and easily read addition to any stock market or ETF investor’s library and comes highly recommended.” —Ed PageCroft, CEO, Stockopedia
“”The Idle Investor is a fantastic self-help guide for readers who would like to invest successfully in financial markets, which can often be very perplexing for both professionals and amateurs. Using concise language, Dr. Shing began by going through the key investment concepts that everyone should know. He then looked at the main risk and return characteristics in each of the major asset classes (equities, bonds, cash and property) and how you can use that knowledge to build your own winning strategies.” —
“What I enjoyed most about the book is its clarity. Dr. Shing explained everything in simple, everyday English and highlighted the most important investing truths along the way. Towards the end of the book, he spelt out how Joe Bloggs can outperform the market in the current low interest-rate, volatile environment, only by following some simple rules of thumb.” —
“It was a real pleasure to read this book; I actually managed to read it from cover to cover within 2 days! I believe the book is suited to both professionals and amateurs who are keen on following disciplined but effective investment strategies!”” —Daniel Ung, CFA, CAIA, FRM, Research & Product Design S&P DOW JONES INDICES
“”The Idle Investor is well pitched for the intended audience, and the clarity of the first 3 chapters in particular gets that message across. I would have no hesitation in recommending the book to anyone I know who is not a full time financial services professional. In addition, I’d go as far as to say that I can think of many people I’ve worked with over the years in financial services, who’d benefit from reading it as well!” —
“The strategies themselves are well laid out, and providing a 1 page summary at the end of each strategy is a big help for readers starting out in the business of DIY investing. Considering the complexity of the subject matter for non financial people (am under no illusions that it’s almost a foreign language for many), Edmund does a pretty good job of making the points in a straightforward manner. Also, by highlighting potential problems with the strategies, I think this gives the book a greater degree of credibility. Any reader looking to find a ‘perfect’ solution for investment has missed the point by this stage anyway.” —
“The final part of the book is also very helpful, with the references section alone being worth the price of admission. To have a concise summary of the best resources for DIY investment work will save readers an enormous amount of time, and I would imagine that for many readers, this will provide a framework to make starting their investment journey considerably easier.” —
“Overall, very impressed. If investment was actually taught in schools at all, can see that this would be a perfect investment primer for teenagers after being taught the basics. Not the aim of the book obviously, but a point worth making.”” —Matt Patterson, private investor
“The author has an easy writing style and tells a good story, giving his personal background and how it has led to the investment strategies outlined in the book. The strategies themselves are well explained and well justified, with a number of simple recipes to follow depending on how actively you wish to manage your funds – though even the most active involves only monthly management. As a relative novice investor, I found the book very easy to read, yet learned a lot from it. I’m looking forward to trying out the author’s strategies, and testing my own discipline in sticking with them!” —Iain Barclay, Amazon reviewer
“The author has plenty of work experience in the financial industry, so it is refreshing to hear him advise you away from fund managers and more towards ETFs with their lower fees and better performance. The lack of stamp duty on them is another plus….I enjoyed the book and was convinced that the strategies would at least offer better returns than cash over time. In fact, I am going to try it with a portion of my SIPP.” —Ryan De VooghtJohnson, Trade2Win contributor

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