Do You Give Investors an Edge?

A site visitor once asked us "would you please give me some examples on what this service can provide for me to get any edge on the market? What are the top reasons why people subscribe and how do they use the information you supply to make money?"

We admired the directness of these questions, and sent an equally direct reply. We thought other potential subscribers would find it interesting.

"The short answer to your question is that people subscribe to The Index Investor because we "give them an edge" not in beating the market, but rather in achieving their long-term investment goals. Let me explain a bit more what I mean.

The first edge we provide is helping people to better understand just what those goals should be. For example, rather than simply beating a market index each year, we help subscribers develop a long-term return target for their portfolio, based on their current saving, expected future saving, accumulation goal, and years left to achieve it.

The second edge we provide subscribers is helping them to identify asset allocations that will maximize the probability of achieving their long-term return target while minimizing the risk they take. There are a number of sub-elements to this. These include (a) understanding the difference between an asset class and a tilt within it; (b) the pros and cons of different asset classes; (c) the strengths and weaknesses of different asset allocation methodologies; (d) how your housing decisions and labor income affect asset allocation; (e) the different approaches you can take to reviewing and rebalancing your portfolio, and (f) the tax consequences of holding different types of assets in taxable versus non-taxable accounts, and how careful attention to this issue can further add to returns over time.

The third edge is helping subscribers identify situations in which a short-term departure from an asset allocation policy is needed to limit risk. This is why we produce our monthly equity and bond market valuation updates, as well as our semi-annual economic reviews.

The fourth edge we provide subscribers is helping them to decide whether or not to take tilts (e.g., toward value or small cap stocks) within the broad asset classes used in our model portfolios.

The fifth edge we offer is helping readers make an informed decision when it comes to choosing between actively managed and index funds to implement our model portfolios' asset allocations.

The sixth edge we provide is helping subscribers choose between the many different types of index funds available in markets around the world. Specifically, we help people sort through the exchange traded fund versus mutual fund issue, and to better discriminate between funds based on, for example, the pros and cons of the underlying index they track, their relative expense levels, and whether they hedge their foreign currency exposure. Over time, these differences can have a significant impact, and we try to help people choose wisely between them. For that reason, we offer lists of different ETFs and mutual funds (e.g., from Vanguard, Fidelity, T.Rowe Price and DFA) that can be used to implement our model portfolios' asset allocations.

The seventh edge is our regular reviews of new index products and strategies.

In sum, for only US$29.50 for six months or $59 for a year, we give our subscribers a lot to think about, and a very big edge when it comes to achieving their long-term financial goals. We hope you'll subscribe today.

If you'd like to ask another question before you subscribe, please don't hesitate to email us.

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