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.
“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