This is a book review of the newly released book titled Redefining Financial Literacy: Unlocking the Hidden Forces of Your Financial Future by Cindy Couyoumjian.
Managing my own retirement investments, I found this book to be very helpful in reshaping my personal retirement portfolio into a more balanced one. Nothing is risk-free, but now through the changes I have made after reading this book twice and putting these investment strategies to work, I am confident I have a more sustainable portfolio with less risk. That is important because I certainly don’t want to run out of money nor take deep losses that will cause interruptions in my lifestyle.
In the first part of the book Cindy lays out in detail reasons the 60-40 investment model may put you in risk and may not protect you in the future, like it has in the past. The stock and bond relationship is not correlated like it was in the past. Both go down at the same time. The timing of the book is spot-on in my opinion. I see how stocks at all-time highs could be a danger to my retirement investments at the same time interest rates could be rising causing bonds to go down in value. Bonds are no longer protection like they were in the past. Also, bonds pay almost nothing.
In the second part of the book an innovative investment model is presented based on Cindy’s research and experience as a financial planner. Cindy offers her REALM model which is short for Retail Endowment Allocation Like Model. It starts with ideas from the investing strategies of the endowments and large institutions and has been tailored for individual investors like us.
The investment strategies of REALM are adapted from the endowment model: passive, tactical, and alternative. However, the focus is on five asset classes that work together in synergistic harmony to potentially offer managed risk for durable income in retirement.
Beginning in Chapter Six the book begins to show you how to create a plan to protect your income and lifestyle in retirement. By the way, some of the asset classes for endowment-like investment include stocks and bonds but to a less percentage than the 60-40 model. Added to that is real estate (REITS), BDCs which stands for business development companies, and absolute return funds. I have already added eight great BDCs to my portfolio (ARCC is my own example) and have purchased an absolute return fund as well. It has been exciting to learn about these new alternative investments. Cindy shows how each of these can help diversify your portfolio in ways the old models may not.
I was a conservative bond ladder investor until that stopped working a couple of years ago. When money from bond maturities had to be put in equities, I reluctantly turned into a stock trader, something I do not want to keep doing. Now with the changes I have made to my portfolio with the help of this book, I have a sounder portfolio that will help protect me from potential problems we now face like low-interest rates, high PE stock markets, and too much correlation between stocks and bonds. Now with a variety of assets, my portfolio is set to better withstand whatever comes next.
I am keeping the book on my desk as a handy reference. I would recommend the book Redefining Financial Literacy to fellow retirees and those nearing retirement who want new ideas to protect their future.
By Robert Fowler
President , Retirement Media Inc.
(Retired and Loving It!)
ABOUT THE AUTHOR: Cindy Couyoumjian’s greatest passion is to empower people by expanding their financial literacy and awareness. As the founder of Cinergy Financial, Cindy believes that financial literacy is a moral imperative, which is why she devoted her professional life to help people understand the constantly evolving financial and economic landscape. As a Certified Financial Planner (CFP), with 34 years in the industry, 8 securities licenses (the series 65, 63, 31, 26, 24, 22, 7, and 6), as well as a California Insurance License (License #0719038), Cindy has become not only a leader in the financial industry but also an innovator of investment methodology.