One of my favorite investing books in which I highly recommend is The Coffeehouse Investor by Bill Schultheis. Mr. Schultheis was a broker for Smith Barney of 13 years until he decided enough was enough and opened his own money management firm Pacific Asset Management. He claims he couldn't take the stock picks, upgrades/downgrades and sell side analysis anymore so he focused his firm on asset allocation by way of index funds.
Warning: this book may be too boring for some, but it works. Schultheis recommends using no load index funds over ETF's because over time the commissions will eat into profits, but ETF's can very easily be substituted if one chooses.
My only criticism of this book is the same criticism as with any investing book. He lays down a great foundation and asset theory for one who has just begun to invest but what about the person with the $500K portfolio? If $500K is currently invested in the I Fund for example, you'd better get your timing right if you plan on re-allocating to one of Mr. Schultheis' index portfolios. Otherwise, you could be stuck with a pretty crummy cost basis.
Coffehouse Investor is one of those books that I pick up off my bookshelf when the market drops some 6% in one day because it reminds me of the importance in staying the course. I think this book is perfect for any TSP investor.
The portfolios laid out below are purely set it and forget it, perfect for a TSP investor who prefers to use funds over a lifecycle fund.
3 ETF Portfolio
33.3% VTI (C & S Fund)
33.3% EFV (I Fund)
33.3% AGG (F Fund)
Coffeehouse Portfolio
40% Vanguard Total Bond
10% Vanguard 500
10% Vanguard Value
10% Vanguard Small Cap
10% Vanguard Small Value
10% Vanguard International
10% Vanguard REIT
More information on the book and a few useful tools and articles can be found at http://newsite.coffeehouseinvestor.com/
Warning: this book may be too boring for some, but it works. Schultheis recommends using no load index funds over ETF's because over time the commissions will eat into profits, but ETF's can very easily be substituted if one chooses.
My only criticism of this book is the same criticism as with any investing book. He lays down a great foundation and asset theory for one who has just begun to invest but what about the person with the $500K portfolio? If $500K is currently invested in the I Fund for example, you'd better get your timing right if you plan on re-allocating to one of Mr. Schultheis' index portfolios. Otherwise, you could be stuck with a pretty crummy cost basis.
Coffehouse Investor is one of those books that I pick up off my bookshelf when the market drops some 6% in one day because it reminds me of the importance in staying the course. I think this book is perfect for any TSP investor.
The portfolios laid out below are purely set it and forget it, perfect for a TSP investor who prefers to use funds over a lifecycle fund.
3 ETF Portfolio
33.3% VTI (C & S Fund)
33.3% EFV (I Fund)
33.3% AGG (F Fund)
Coffeehouse Portfolio
40% Vanguard Total Bond
10% Vanguard 500
10% Vanguard Value
10% Vanguard Small Cap
10% Vanguard Small Value
10% Vanguard International
10% Vanguard REIT
More information on the book and a few useful tools and articles can be found at http://newsite.coffeehouseinvestor.com/
