NAOI Investor Education - A New Approach to Investing

A New Approach to Investing

NAOI Courses incorporate a totally new and more effective approach to the world of investing. This approach and its benefits will become obvious as you read about the Confident Investing Series in the "Study Courses" area of this site. But it is worthwhile to provide a concise overview of this unique approach here.

The Problem to be Solved

The world of investing is vast and confusing to new and experienced investors alike. NAOI public surveys show that many individuals seeking to become better investors simply throw up their hands in despair when looking at today's investor education offerings. They see hundreds of random investing books, Web sites, seminars, newspaper columns, radio shows, TV shows, etc. etc., all claiming to provide the secrets of investing success. These resources are not education, they are mostly "noise", and often provide more confusion than help to the individual who needs comprehensive and objective education.

The Solution: NAOI Education

Based upon a massive amount of input from the public the NAOI defined a course product line that represents a totally new and uniquely effective approach to investor education. This approach includes the following course components and design elements.

Comprehensive and Objective course content covering the full range of investing activities that individual investors should consider for their portfolios
A Planning Process that enables individuals to define goals and work through a logical and step-by-step process for designing a portfolio for meeting these goals
Online tools such as calculators, worksheets and checklists for enabling individuals to actively participate in the learning process
A roadmap to the best external Investing Resources on the Web that can enable individuals to transform the knowledge gained into practical action
A true learning environment that includes testing, knowledge reinforcement, motivation and reward
A novel approach that brings structure to the chaotic world of investing - an approach that enables individuals to build a portfolio in a logical and pragmatic manner. An approach that makes sense.

We expand on this last point below:

NAOI Defined Portfolio Segments

From close to a decade of experience in teaching investing, the NAOI realized that the world of investing can be logically divided into four types of investing activity, each with its own profile in terms of risk, reward and investor involvement required. We designated these activities as NAOI Portfolio Segments and created a standalone Study Course for each. These courses combined make up the NAOI Confident Investing Series - an educational resource that covers the entire field of investing activities that are appropriate for the individual investor.

The following table shows the NAOI-defined Portfolio Segments, the related Investment Type, the Confident Investing Series Course dedicated to each and a Target Return that the NAOI feels is possible from each:

Portfolio Segment	Confident Investing Series Course	Investing Type and Role in a Total Portfolio	Target Return
1	Course 2: Building Your Core Funds Portfolio	Core Funds. These are your portfolio’s “buy and hold” investments that form the core of your portfolio. They will be well diversified, have moderately low risk and require little active attention on your part. Target returns will be modest but NAOI graduates will not settle for market averages either.	12% +
2	Course 3: Investing In Focused Funds	Focused Funds. This investment type enables you to invest in targeted market segments such a Energy, Gold, Real Estate, etc. Focused Funds offer the potential for significantly boosting the returns of a well designed portfolio.	20% +
3	Course 4: The Art and Science of Trading Individual Stocks	Individual Stocks. To significantly beat market averages you need to consider trading individual stocks. This is not “day-trading”. Rather the NAOI teaches “momentum” trading where you hold stocks for days, weeks or months in order to achieve substantial gains in short periods of time.	25% +
4	Course 5: Stock Options for the Average Investor	Stock Options. Despite the common view, options do not need to be either risky or complicated. They can be used to leverage your stock buying power, provide a low risk income stream and even to protect your portfolio from losses. All investors should understand and consider using this valuable investing type.	20% +

These Segments cover the full range of investing activities that the typical individual investor should consider for their portfolio. Each can serve a distinct purpose in a well-designed portfolio and they can be mixed and matched to create a portfolio that meets the unique "style" of every individual investor. Refer to the "Study Courses" area of this site for a detailed explanation of each Course/Segment and to the "Your Investing Style" area for a discussion of your unique investing stye.

A Logical Portfolio Design Process

The Portfolio Segment approach to investing provides you with discreet modules that you can use to design a portfolio that meets your unique needs in terms of: financial goals, risk tolerance and amount of time you are willing to dedicate to the investing process.

With this structure, the Portfolio Design Process can be simplified to include these steps:

Understand each Investment Type / Segment by completing the corresponding NAOI Education Course
After graduating from each course you will fully understand the investing activity and the risk/reward it entails. As a course graduate you can then estimate a Target Return for the corresponding Portfolio Segment.
Use the "NAOI Segment Allocation Calculator" - provided in the online component of each NAOI Course - to define a Total Portfolio that meets your unique return requirements. The variables are the Target Return for each Segment and the amount of your total investing money Allocated to each Segment.

Below is an example of the results of the Segment Allocation Calculator that shows one possible Portfolio Allocation Model and Target Return.

Total Portfolio Segment Allocation Worksheet

Portfolio Segment	Allocation %	Target Return %	% Segment Contribution
Core Funds	60%	12%	7.2%
Focused Funds	20%	20%	4.0%
Stock Trading	15%	20%	3.0%
Options Trading	5%	20%	1.0%
	100%	Total Target Return:	15.2%

This example illustrates the power of the Portfolio Segment Approach to investing. You can see that the Allocation % you assign to each Segment defines both the Return and Risk of the total portfolio. The more you assign to Core Funds the lower the portfolio risk and return. The more you assign to the other, more profitable, Segments the higher will be the risk/reward profile of the portfolio.

Refer to the "Design Your Portfolio" selection on the submenu at the top of this page to try your hand at designing various portfolio models.

Finally, a Logical and Structured Approach to Investing !

The NAOI Portfolio Segment is the approach needed to make sense of the vast and confusing world of investing. The approach breaks down the entire field into four discreet Segments, each involving a unique type of investing. And you will learn how to work with each type of investing activity in a dedicated NAOI Course.

As a graduate of each course you will be able to answer the following questions:

Do you want to include this Segment in your portfolio?
If so, what do you feel is a feasible Target Return?
If so, how much of your portfolio do you want to allocate to this Segment?

This is the structure that you need to make intelligent investing decisions. This is the approach that brings order to chaos. And this is the approach that will enable you to construct an Investing Plan that can guide you to portfolio returns that you may not think now are possible.