GROW · VOLUME 2 OF 3 · STRATEGIESInvesting shelf
Stocks & Bonds Mastery
The strategy volume of the investing shelf. It shows how to choose a mix of stocks and bonds you can hold through a crash, fill it with low-cost index funds in the right wrapper, decide how much to hold abroad, keep the mix on target without needless taxes, and judge individual stocks and alternative investments with clear eyes.
Chapters7
Reading time40 min
Worked examples16
Updated2026-10-01
What you will be able to do
- Choose a target mix of stocks, bonds and cash from your time horizon and the losses you could live through, using the historical record.
- Explain why low-cost index funds beat most active funds after costs, and measure what fees cost you over your own horizon.
- Decide between a mutual fund and an ETF for each account, and between hedged and unhedged international funds.
- Rebalance on a schedule or a band while keeping trades in tax-advantaged accounts and taxable gains to a minimum.
- Size any individual stocks or alternative investments so a mistake stays small, and test whether they are earning their keep.
Contents
7 CHAPTERS · ABOUT 40 MIN- 01Asset Allocation: Choosing Your Mix of Stocks and Bonds Why the split between stocks, bonds and cash sets most of your risk, what the worst years looked like at each mix since 1928, how bonds can fail to cushion, and how to choose a mix you can hold.6 min4 computed
- 02Index Funds and the Arithmetic of Costs Why owning the whole market beats most professionals after costs, what fees and badly timed trading cost over thirty years, what an index fund cannot protect you from, and how to compare index funds.6 min3 computed
- 03Mutual Funds and ETFs: Same Holdings, Different Wrappers How mutual funds and ETFs are bought, priced and redeemed, the costs beyond the expense ratio, why capital gains distributions make the wrapper matter in a taxable account, and how to choose by account.6 min1 computed
- 04International Stocks, Currency and Home Bias Why one home market can disappoint for a decade or more, the costs and foreign tax credit that come with investing abroad, how currency moves change your return, and the range of shares investors hold outside the US.5 min1 computed
- 05Rebalancing: Keeping the Risk You Chose How fast a portfolio drifts from its target, what rebalancing does and does not do for returns, calendar, band and cash-flow methods, and how to rebalance without an avoidable tax bill.5 min4 computed
- 06Picking Individual Stocks: The Odds, the Tools and a Safe Size Why most individual stocks trail the market, the fundamental measures and investing styles analysts use, how position size limits the damage of a mistake, and how to test honestly whether your picks are working.6 min2 computed
- 07Alternative Investments: What They Offer and What They Cost What private equity, hedge funds, private credit, commodities and crypto are, what 2 and 20 fees cost over twenty years, why reported returns flatter, and the low-cost public versions open to every investor.6 min1 computed
CALCULATORS USED IN THIS BOOK