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Review

“Craig Israelsen has an interesting idea: Let's leave 1950 behind. The associate professor at Brigham Young Universityhttp://topics.dallasnews.com/topic/Brigham_Young_University in Utahhttp://topics.dallasnews.com/topic/Utah thinks it's time to include the world outside the United States, among other things, in our investments rather than just talk about it . . . . This is accomplished with what Israelsen dubs the ‘7Twelve Balanced Fund.’ Rather than just domestic stocks and bonds, the new benchmark has seven asset classes. Those asset classes, in turn, are subdivided into a dozen subsets, all held in equal amounts. The payoff is huge. Over the last 10 years, his better balanced index provided a return of 7.52 percent annualized. The Vanguard Balanced Index fund did better than nearly 60 percent of its managed competitors but returned only 2.64 percent over the same period. That 7.52 percent return would have ranked Israelsen's passive index in the top 2 percent of all moderate allocation funds. Indeed, it would have ranked in the top 30 percent of all world allocation funds - funds that do invest in a broader menu of assets . . . . This is no guarantee of investment nirvana, but it's a good start for a new millennium.”―Scott Burns, Syndicated Columnist, Dallas Morning News (March 27, 2010)

Product Description

A proven way to put together a portfolio that enhances performance and reduces risk

Professor Craig Israelsen of Brigham Young University is an important voice in the area of asset allocation. The reason? He keeps things simple. Now, in 7Twelve, he shows you how to do the same, and demonstrates how his approach to investing can help you grow your money as well as protect it.

7Twelve outlines a multi-asset balanced portfolio that is a logical starting point when assembling a portfolio-either as the blueprint for the entire portfolio or as a significant building block. Page by page, he will show you how to create a balanced portfolio utilizing multiple asset classes to enhance performance and reduce risk.

• Discusses how the 7Twelve portfolio includes seven core asset classes and utilizes twelve specific mutual funds or exchange traded funds
• Details the tax efficiency of this specific investment approach
• Shows you how to use the 7Twelve portfolio as a pre-retirement accumulation portfolio or a post-retirement distribution portfolio

If you want to build a well-balanced, multi-asset portfolio, 7Twelve is the book for you.

From the Inside Flap

While most investors would agree that diversified, low-cost investing makes great sense for everyone, the reality is that the average investor has very little experience building a diversified investment portfolio. Most investors end up cobbling a few different mutual funds together, resulting in a portfolio that lacks true diversification. 7Twelve shows you how to build a diversified, multi-asset portfolio using "7" core asset classes (or investment categories) by utilizing "Twelve" underlying mutual funds.

Author Craig Israelsen clearly explains just how easy it is to manage a successful portfolio with a plan, rather than managing your money piecemeal. His three key guidelines in the 7Twelve recipe are deceptively simple: select 12 different ingredients (such as mutual funds), allocate your investment equally among all 12 funds, and rebalance the 12 funds on a periodic basis, such as annually. Israelsen describes in straightforward and ready-to-apply terms what your portfolio should look like and outlines how to make it a reality for you. In 15 succinct chapters, he takes you step by step through the process of building and managing a portfolio that optimizes performance and minimizes risk. He begins by demonstrating how diversification is actually achieved and introduces various ways to meaningfully measure portfolio performance. He then outlines how to actually build and manage the 7Twelve portfolio―from periodic rebalancing to changes in the asset allocation over the life cycle―and specifically addresses the all-important issue of portfolio durability during the retirement years. Israelsen also presents research that sheds light on some of the most-debated topics among investors: value versus growth, active versus passive investing, and some of the perplexing problems in many target- date mutual funds.

Better risk-adjusted performance is the key benefit of building broadly diversified investment portfolios, and only by combining a wide variety of asset classes can an investment portfolio produce superior performance with lower levels of risk. The 7Twelve approach provides diversification depth within each separate mutual fund, and diversification breadth across the 7 asset classes―a recipe that provides ideal risk-controlled performance.

From the Back Cover

A powerful, easy-to-use new asset allocation strategy

7Twelve provides a time-tested recipe for building a diversified, multi-asset investment portfolio with twelve low-cost mutual funds. Author Craig Israelsen keeps it simple with easy-to-understand explanations and illustrative graphs throughout the text as he shows you how to create a balanced portfolio utilizing multiple asset classes to enhance performance and reduce risk. His approach has generated stellar returns over the last ten years―and you can have similar success using major mutual fund companies and ETFs.

In straightforward, clear language, Israelsen tells you how to build your 7Twelve portfolio with 7 core asset classes and twelve specific mutual funds or exchange traded funds. He also shows you how to use the 7Twelve portfolio as either a pre-retirement accumulation portfolio or a post-retirement distribution portfolio.

If you want to build a balanced, multi-asset portfolio that can help you grow your money as well as protect it, 7Twelve is the recipe you need.

Praise for 7Twelve

"People who panic during an economic crisis don't have a sound investment plan. Craig Israelsen provides a sensible plan that really works!"
― Richard Ferri , CFA, founder, Portfolio Solutions, LLC, and author of The ETF Book: All You Need to Know About Exchange-Traded Funds

"When Craig Israelsen speaks, I always pay attention. Here, he tackles―and answers―the pre-retiree's and retiree's most important question: How do I make my money last for life?"
― Jane Bryant Quinn , author of Making the Most of Your Money NOW

"You can never be sure how the markets will perform. But you can manage risk. Don't know where to start? Let Craig Israelsen be your guide."
― Jonathan Clements , author of The Little Book of Main Street Money

About the Author

CRAIG L. ISRAELSEN , PhD, is an Associate Professor at Brigham Young University (BYU) in Provo, Utah, where he teaches personal and family finance to over 1,200 students each year. He holds a PhD in family resource management from BYU and received a BS in agribusiness and an MS in agricultural economics from Utah State University. Prior to teaching at BYU, Israelsen was on the faculty of the University of Missouri–Columbia for fourteen years where he taught personal and family finance in the Department of Personal Financial Planning.