New investing book: Muscular Portfolios

Muscular Portfolios is a new investing book by Brian Livingston.  Mr. Livingston has published many books before, primarily related to computers and technology, and this is his first in the investment arena.  Not surprising, the approach he takes is computer driven and quantitative.   Possibly more surprising is that his method is neither technical nor complicated, but a straight forward approach to momentum style investing with ETFs.

Livingston presents three models to the reader targeted to different portfolio sizes.  The two primary portfolios require only a monthly review and each generally holds three funds.  The difference being that one selects from a larger asset class pool and will likely be more active.  The simplest portfolio is targeted as a starter portfolio and is a simple two fund portfolio with annual re-balancing.  Full historical performance is provided with significant discussion of drawdowns and bear market conditions.  It’s really refreshing to see an author address the down market realities head-on.  There is no running from the fact that markets go down and portfolios do also.

In addition to these models, Livingston pulls together much of the research and learning that has defined portfolio theory over the past generation.  From Modern Portfolio Theory to fractals, it is covered along with quotes and investing tid-bits from the likes of Bill Sharpe, Robert Shiller, and Warren Buffett.

Muscular Portfolios is packed full of charts and other visuals to support the points being made by the author.  One of my favorite charts is documenting Buffett’s performance during bull and bear markets since 2000, emphasizing that he has under performed the market during the bull periods but still beat the averages by a large margin over time.

Other topics covered range from portfolio creation, to selecting a broker, to minimizing tax consequences.  It obviously covers a lot of territory but is well presented with numerous visuals making the book approachable and educational for both the beginner and the experienced investor.

I should point out that Mr. Livingston has been a long time member and supporter of our ETFScreen.com site, and that I’ve had numerous conversations with him over the past several years related to investing in general and the research he has done for this book.  He has been a benefit to me personally, and his feedback has positively impacted the site.

The book is available at both Amazon and Barnes and Noble, and probably at your favorite book seller.  I’ll end with a couple of quotes from people you might recognize:

“I know of no book for a general investment audience that is more thoroughly researched and backed up by hard data.”
—Mark Hulbert, founder of the Hulbert Financial Digest

“Don’t let your portfolio atrophy, read Muscular Portfolios and pump up your wealth.”
—Mebane Faber, coauthor of The Ivy Portfolio

 

 

 

5 thoughts on “New investing book: Muscular Portfolios

  1. Hi Hugh,

    Thank you for your informative review of Brian Livingston’s new book [“Muscular Portfolios”].

    In the review, you state: “Livingston presents three models to the reader targeted to different portfolio sizes. The two primary portfolios require only a monthly review and each generally holds three funds. The difference being that one selects from a larger asset class pool and will likely be more active. The simplest portfolio is targeted as a starter portfolio and is a simple two fund portfolio with annual re-balancing.”

    So, my question to you is: Do Livingston’s models use the same type of variables that are available on ETFScreen, so that I would be able to run Livingston’s models on your ETF Screener — in order to explore the impact of modifying the parameters to see their impact on the bottom-line results.

    As you know, I am a satisfied subscriber to ETFScreen !!
    TIA.

  2. I don’t have the book in front of me at the moment but I believe they would be back-testable with the tools on this site excluding the periodic rebalancing, which we don’t support. I’ll try to take a look tonight when I’m back home.

  3. After another review of the models described in Livingston’s book, I think you could back-test models very close using tools on this site. I may have missed something, but the re-balancing rules are the only detail that I see being a problem, and I don’t know that it would be significant. If you try it, please let me know how it works. I should stress, though, that the book has much more to offer than just the three models. – Hugh

  4. Hugh,
    Clearly your User’s Guide has not been updated to include the fact that you now have a 5 month Total Return and a 3-6-12 month return.

    The 5 month return is quite easy to understand but what is the exact math formula behind the 3-6-12 return?

    Dave

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