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Wednesday, December 09, 2009

Kirk Lindstrom's Two Investment Letters

There may be some confusion because I write two different, but related, newsletters.

#1 "Kirk Lindstrom's Investment Letter" is $155 a year and uses the "core and explore" method to invest. It has two core portfolios plus an explore portfolio of individual stocks. My aggressive core portfolio has 80% equities while my "conservative" core portfolio has 50% in equities. My core portfolios are made of index funds and ETFs for the very lowest expenses.

I recommend people start by getting their proper core portfolio created THEN add individual stocks I cover in my explore portfolio to build your own explore portfolio for 5 to 20% of your investment portfolio total.

"Kirk Lindstrom's Investment Letter Explore Portfolio" gained 33.5% in 2009 This portfolio has 75% in equities and 25% fixed income with a beta of 1.0. For 2009, the DJIA gained 19.2% and Warren Buffett's BRKA only gained 2.4% (FREE Sample Issue)

I have target prices to buy and sell my explore stocks so I find I almost look forward to market declines to get really great prices for stocks I can sell later at higher prices. Of course, following this explore portfolio is more work than buying index funds and rebalancing once a year that I recommend for my core portfolios. Compared to "other newsletters" costing more, my core portfolios and general stock market coverage in the first 11 pages of the 35 page monthly letter offer significant value even for those who don't dabble in individual stocks.

#2 I write "The Retirement Advisor" with David Korn. We sell this for a very modest $99. We offer three model portfolios. We do not recommend individual stocks but we have articles that discuss current financial events such as economic data and Social Security COLAs. We also have articles to help you save money plus we find CDs with FDIC paying the highest rates. Our most aggressive portfolio has 50% in equities. Our most conservative portfolio contains no equity exposure.

Difference: The conservative (50:50) core portfolio in "Kirk Lindstrom's Investment Letter" is slightly more aggressive than the aggressive model portfolio #1 in "The Retirement Advisor." Over the very long term, you should expect the most aggressive portfolio to have the highest returns but at a price of higher volatility. When we started the "The Retirement Advisor" in 2007 we thought people like Bob Brinker were far too aggressive with equity exposure recommendations for retired people at such a risky time for the markets. If you recall, Brinker's Model Portfolio #3 was nearly 2/3rds in equities when the markets peaked. As our great returns show, we were right.

Summary:

"Kirk Lindstrom's Investment Letter" is for those who want to use individual stocks in an attempt to enhance their core portfolio returns. Some like to buy or trade individual stocks for extra return as they try to beat the markets over the long term as they build their investment portfolios to retire someday in the future. For those people, I recommend they place 120% less their age of their investment portfolio in my "core aggressive" portfolio and use remainder to follow some or all of my explore portfolio. For example, someone 40 years old would have 80% in my core aggressive portfolio and 20% in my explore portfolio.

For those at critical mass in retirement, there is no need to take a lot of risk so I recommend 95% of investment assets in my "core conservative" portfolio and the remaining 5% in some or all of my explore portfolio for "entertainment."

In sharp contrast, "The Retirement Advisor" has no individual stock advice. The portfolios are designed not to try and beat the markets but to help you sleep better at night in retirement with lower portfolio volatility. "The Retirement Advisor" also helps you manage your "living expense" or "emergency" account that is outside your investment portfolio. In addition to portfolio and living expense management help, "The Retirement Advisor" has articles to help you save money, understand Social Security, follow the basics of the economy and how it relates to our advice.

Many of my readers subscribe to and enjoy both newsletters.
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From 1/1/1999 Through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 50.8%
Kirk's 50:50 Conservative Core Portfolio is up 67.3%
Kirk's 70:30 Explore Portfolio is up 146.1%
80% Core Aggressive plus 20% Explore is up 69.8%
90% Core Conservative plus 10% Explore is up 75.1%

100% Total Stock Market (VTSMX) is up 18.2%
100% Total Bond Market (VBMFX) is up 78.2%
80% VTSMX and 20% VBMFX is up 30.2%
50% VTSMX and 50% VBMFX is up 48.2%
YTD through 11/15/09
Kirk's 80:20 Aggressive Core Portfolio is up 23.0%
Kirk's 50:50 Conservative Core Portfolio is up 16.4%
Kirk's typically 70:30 Explore Portfolio is up 26.7%

100% in VTSMX is up 25.1%
100% in VFINX (S&P500) is up 23.7%
100% in VBMFX (Total Bond) is up 6.6%
80% VTSMX and 20% VBMFX is up 21.4%
50% VTSMX and 50% VBMFX is up 15.9%
12/8/09 update:

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

"Kirk Lindstrom's Investment Letter"
HURRY! Subscribe NOW and get the January 2010 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)
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The Retirement Advisor Model Portfolios all began with $200,000 on 1/1/2007

The Retirement Advisor Portfolios Dollar Value on 11/30/09 Change
Model Portfolio 1 $207,652 3.8%
Model Portfolio 2 $224,330 12.2%
Model Portfolio 3 $240,903 20.5%
DJIA 12,501.52 on 1/1/2007 $9,712 (17.3%)
S&P500 1,418.30 on 1/1/2007 $1,057.08 (22.8%)

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FREE SAMPLE issue of The Retirement Advisor newsletter in pdf

Kirk Lindstrom's Investment Letter Performance

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