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The Muscular Portfolios Newsletter — No. 11 — Oct. 9, 2018
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 Write a review at Amazon
Oct. 9 is the official publication date of Muscular Portfolios. Everyone who preordered the book should have received it in their mailbox by that date. The book qualifies for Amazon Prime, so you can get it with 2-day free shipping or overnight, if you wish.
Now — if you have a copy of the book — write a quick review at Amazon. We love 5-star reviews, but if you can honestly give it only 4 stars, we'll still be friends. We just want to get the word out to as many people as possible. Thanks for your support!
Order from Amazon or Barnes & Noble
"The investing book of the decade ... Investors will be profiting from these methods for ages to come."
—HUGH TODD, CEO of ETFScreen.com
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Your feedback is great
 By Brian Livingston
I'm very gratified by the feedback from people who've read my book or this newsletter. I read every comment that comes in, and I try to repeat the information in the newsletter when other people would benefit from the answer.
Here's some Q-and-A that arrived this month. This stuff will eventually make its way onto a new FAQ page at our website — but you're reading it here first.
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Which funds represent small-cap equities best?
Q. "In Newsletter #5 [May 2, 2016] — Method 2, 'How to follow the portfolios if my site is down' — you include a link for the Mama Bear that has in it the tickers VTWO and TLT. They do not appear on the Muscular Portfolios Web page. Shouldn't the newsletter say VIOO and VGLT?" —Michael M.
A. During advance reviews of the manuscript, Vanguard's Russell 2000 ETF (VTWO) was originally used to represent US small-cap equities. That's what got into our beta-test newsletter in 2016. However, before the book went to press, we chose the S&P 600 small-cap index (VIOO) for the Mama Bear Portfolio instead. We also chose the small-cap growth and value subsets of the S&P 600 (VIOG and VIOV) for the Papa Bear Portfolio.
The S&P 600 consistently outperforms the Russell 2000. The difference is almost 2 percentage points annualized, as shown in Figure 1. The S&P 600 also suffers smaller losses than the Russell 2000 during bear markets.
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Figure 1. The S&P 600 small-cap index consistently outperforms the Russell 2000. The difference is almost 2 percentage points annualized.
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The main reason for the S&P 600's outperformance is that the Standard & Poor's Index Committee includes primarily those small-cap stocks that are profitable. The Russell 2000, by contrast, encompasses every small company, including many that are unprofitable and a drag on performance. The S&P 600 uses a simple version of what experts call a "quality filter."
A similar process resulted in Vanguard's VGLT long-term Treasury bond fund being selected for the book, rather than iShares' TLT. VGLT has a lower annual fee than TLT and roughly similar performance.
For more information on why these funds were selected, see Newsletter #9. Also see the Mama Bear and Papa Bear pages at our website.
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Pixel phones need fixing to support redirection
Q. "The tiny links in your book, like bri.li/1000, work on my desktop computer, but not on my Google Pixel phone." —S.Y.
A. The Pixel phone doesn't natively support redirection. That hurts Web address shorteners such as "bri.li" that let you enter a short address to go to a Web page with a very long address. The solution is to configure your Pixel browser to support tiny links as a "Desktop site," as shown in Figure 2.
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Figure 2. Users of Pixel phones must configure their browsers to view links as a "Desktop site," as shown at left. This supports redirection by "Web address shorteners" such as bri.li.
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The book Muscular Portfolios includes 576 footnotes. All of them have a tiny bri.li version, so no one has to enter by hand the long destinations, some of which are hundreds of characters long. (We're lookin' at you, Google Books.)
If you have any further problems, you can visit the book's 1st edition notes page. It shows both the tiny and the long versions of every destination found in the book's footnotes.
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What other people are saying...
"The biggest obstacle to long-term investment success is 'the dogma that you must beat the S&P 500 during bull markets.' So writes Brian Livingston in his new book Muscular Portfolios: The Investing Revolution for Superior Returns with Lower Risk. I couldn’t agree more."
—Mark Hulbert, founder of the Hulbert Financial Digest, in MarketWatch, Oct. 1, 2018
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Free stuff you might enjoy
If you've read this far, you deserve a reward — a free, downloadable 10-page special report that summarizes the book Muscular Portfolios as well as the latest advances in financial technology (fintech):
Special report on Muscular Portfolios and fintech
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