DIY Financial Advisor: A Simple Solution to Build and Protect Your WealthDIY Financial Advisor is a synopsis of our research findings developed while serving as a consultant and asset manager for family offices. By way of background, a family office is a company, or group of people, who manage the wealth a family has gained over generations. The term 'family office' has an element of cachet, and even mystique, because it is usually associated with the mega-wealthy. However, practically speaking, virtually any family that manages its investments independent of the size of the investment pool could be considered a family office. The difference is mainly semantic. DIY Financial Advisor outlines a step-by-step process through which investors can take control of their hard-earned wealth and manage their own family office. Our research indicates that what matters in investing are minimizing psychology traps and managing fees and taxes. These simple concepts apply to all families, not just the ultra-wealthy. But can or should we be managing our own wealth? Our natural inclination is to succumb to the challenge of portfolio management and let an 'expert' deal with the problem. For a variety of reasons we discuss in this book, we should resist the gut reaction to hire experts. We suggest that investors maintain direct control, or at least a thorough understanding, of how their hard-earned wealth is managed. Our book is meant to be an educational journey that slowly builds confidence in one's own ability to manage a portfolio. We end our book with a potential solution that could be applicable to a wide-variety of investors, from the ultra-high net worth to middle class individuals, all of whom are focused on similar goals of preserving and growing their capital over time. DIY Financial Advisor is a unique resource. This book is the only comprehensive guide to implementing simple quantitative models that can beat the experts. And it comes at the perfect time, as the investment industry is undergoing a significant shift due in part to the use of automated investment strategies that do not require a financial advisor's involvement. DIY Financial Advisor is an essential text that guides you in making your money work for you not for someone else!

DIY Financial Advisor: A Simple Solution to Build and Protect Your WealthDIY Financial Advisor is a synopsis of our research findings developed while serving as a consultant and asset manager for family offices. By way of background, a family office is a company, or group of people, who manage the wealth a family has gained over generations. The term 'family office' has an element of cachet, and even mystique, because it is usually associated with the mega-wealthy. However, practically speaking, virtually any family that manages its investments--independent of the size of the investment pool--could be considered a family office. The difference is mainly semantic.DIY Financial Advisor outlines a step-by-step process through which investors can take control of their hard-earned wealth and manage their own family office. Our research indicates that what matters in investing are minimizing psychology traps and managing fees and taxes. These simple concepts apply to all families, not just the ultra-wealthy.But can--or should--we be managing our own wealth?Our natural inclination is to succumb to the challenge of portfolio management and let an 'expert' deal with the problem. For a variety of reasons we discuss in this book, we should resist the gut reaction to hire experts. We suggest that investors maintain direct control, or at least a thorough understanding, of how their hard-earned wealth is managed. Our book is meant to be an educational journey that slowly builds confidence in one's own ability to manage a portfolio. We end our book with a potential solution that could be applicable to a wide-variety of investors, from the ultra-high net worth to middle class individuals, all of whom are focused on similar goals of preserving and growing their capital over time.DIY Financial Advisor is a unique resource. This book is the only comprehensive guide to implementing simple quantitative models that can beat the experts. And it comes at the perfect time, as the investment industry is undergoing a significant shift due in part to the use of automated investment strategies that do not require a financial advisor's involvement. DIY Financial Advisor is an essential text that guides you in making your money work for you--not for someone else!

Preface xiAcknowledgments xiiiPART ONE Why You Can Beat the Experts 1CHAPTER 1 Are Experts Trying Too Hard? 3Why Do We Rely on Experts? 6What Are the Experts' Incentives? 9Are Experts Worthless? 11The Expert's Hypothesis 13Summary 14Notes 15CHAPTER 2 Simple Models Typically Beat the Experts 17The Evidence Shows... 20A Study of All the Studies 21What if Experts Have the Model? 23But Investing Is Different, Right? 24Why Experts Fail to Beat Models 26Summary 28Notes 29CHAPTER 3 Experts Are Biased and Overconfident 31The Biased Brain 33Summary 47Notes 48CHAPTER 4 Experts Tell Us Stories, Not Facts 49Story-Based Investing 52Evidence-Based Investing 53The Recap: Why Experts Fail 60Why Not Use Models? 62Summary 63Notes 64PART TWO How You Can Beat the Experts 67CHAPTER 5 A Framework for Investment Decisions 69Assessing an Advisor Is Difficult 71The FACTS Framework 75We've Got the FACTS: Now What? 86Summary 90Notes 90CHAPTER 6 A Simple Asset Allocation Model That Works 91Asset Allocation 95A Simple Asset Allocation Model That Works 98But Which Assets Do We Choose? 103Summary 104Notes 105CHAPTER 7 A Simple Risk Management Model That Works 107A Simple Risk Management Model That Works 109How Does ROBUST Work? 113Summary 121Risk Management Research (For Geeks Only) 121Notes 129CHAPTER 8 Simple Security Selection Models That Work 133Value Investing 134Momentum Investing 140A Simple Momentum Model That Works 146Combining Value and Momentum 148International Stocks 151Get 'Er Done 153Summary 154Notes 154CHAPTER 9 The Do-It-Yourself (DIY) Solution 157Exploring a Simple Equal-Weight Five Asset Class Model 159Enhancing the Ivy 5 Concept 163Finish Strong: The Ultimate DIY Solution 171Get 'Er Done 175Notes 176CHAPTER 10 Some Practical Advice 179Three Reasons We Will Not Be a DIY Investor 180Three Reasons You Might Fail 183But Don't Lose Hope! 185Is DIY the Only Solution? 186Notes 187Appendix: Analysis Legend 189About the Companion Website 191About the Authors 193Index 195