The Efficient Investor

So I thought it high time I began an investor blog to do a sort of beginner stock market investing for young people who perhaps are just finding their first job, or first professionally paying job and they’re wondering what they should be doing with the extra money they earn every week. I’m not a licensed advisor, so I can’t accept any fees for telling you what to do with your money but I can however point you in the right direction.

This is not intended to be a blog for people involved in day-trading (that page is here and run by Barry). I’m happy to discuss and make suggestions about long term strategies but I have no intention of sitting in front of a computer screen all day with my stomach churning as I watch the market swoon every day. That is NOT the way I intend to live my life. I do allocate a small portion of my portfolio to short term momentum plays, but I don’t much consider that investing. That is arbitrage, and while arbitrage is nice the opportunities are usually so short lived there would be no way for me to communicate them here in time for you to do anything with them… although I did have one arb opportunity that held out for about 2 months. It was quite a nice payout when all was said and done. A tidy 200+% gain for about 2 months holding period. Not bad for a market that seems to find new bottoms everyday.

Why Should You Listen to Anything I Say?
Let me introduce myself. My name is Martin Sage. I have been investing in the stock market for 20 years. I saw the recession of the early 90s followed by the boom of the late 90s. I saw the dot-com bust and 9/11 economic collapse. We’re all weathering the present perfect financial storm. My background in finance was refined at the University of Southern California’s Marshall School of Business. I went on to earn a Master’s Certificate from Southern NH University. For my own personal portfolio I design and implement ‘efficient frontier portfolios’ consisting of a mix of stocks and or mutual funds allocated in such a way as to optimize the risk/return profile. When and efficient portfolio is combined with a risk-free asset such as a money market mutual fund or treasury bill an efficient frontier is created. WhenI invest, my goal is to create an efficient frontier and then allocate my assets between the efficient portfolio and the risk free asset to acheive an expected return of 12% annually with as little risk as I can acheive using my methodology. You can see an example of this type of efficient portfolio at a recent post I wrote for another blog.

In this market, it’s been hard to acheive any type of return, but I have had some success short term, as mentioned above. I do believe we’re finally at the baby-boomer capitulation… where baby-boomers beginning to retire have quickly migrated their assets from the stock market and into fixed income securities. They’re in for a rude awaking when Fed Chairman Ben Bernanke has to raise interest rates in about 8-10 months and inflation is sky-rocketing.

Well, enough speculation for now. Welcome to theefficientinvestor.com I hope you enjoy your stay and learn a little about investing while you’re here. I don’t intend this to be a “Mad Money” type forum where I run around hyping stocks and bonds. I’d rather spend my time teaching you HOW to think about investing your money so that by the time you’re done reading all this stuff you know not to listen to guys yelling on the TV and those ‘hype the market’ kind of guys.