What are good resources to learn about portfolio construction?

Question

I have mutual fund and index fund investments but would like to try creating my own portfolio. What are some good resources that explain how to create a diversified portfolio and how to rebalance and decide when to buy/sell new securities? I'd like to incorportate ETFs in the portfolio

Answer 1

Unfortunately, there are thousands and thousands of books and ideas on how to construct a well-balanced portfolio so I would hate to recommend just one or a handful.  There are many factors involved – age, risk tolerance, quality of life after retirement, etc…  You should probably sit down and write down what you want to retire on, how much you want to invest per paycheck and at what age you want to retire.  Then figure out what your risk tolerance is and they look for books or do research on the kind of investing fits your style.  Not a fun process but well worth your time, you are on your way.  

Answer 2

One resource that I use is "All About Asset Allocation" Richard Ferri.  But if you are going to invest in individual companies, you also need references on how to pick individual companies.  A couple of books on the subject are "The Intelligent Investor" Benjamin Graham and "Sensible Stock Investing" David Van Knapp.  The 2nd is a cook book approach to picking stocks.  Although I do not completely agree with the methodology the concept is nevertheless a good beginning.  

Answer 3

I do agree with the first answerer, Muncie Birder, on the books I'd recommend (especially Intelligent Investor, which was commented by world's richest man according to Forbes, Warren Buffett, as "The greatest book in the history of books"). In elaboration, I'd recommend reading Investopedia's array of articles on Portfolio construction:

List of Mutual Fund articles: http://www.investopedia.com/articles/mut...

List of Stocks Articles: http://www.investopedia.com/articles/sto...

List of Article Lists: http://www.investopedia.com/articles/