Quick Start

Quick Start Your New Investing Plan
The 3% Signal helps you
achieve stock market successwith minimal stress—and NOstress from indecision. All
actions are determined by aformula on a set schedule.
This Quick Start guide will
direct you to key points of theplan from The 3% Signal. It
includes page number referencesfrom the book for easy furtherreading. Let’s get you started!

1. Choose Your Funds
The 3% Signal (3Sig) uses
only two funds: a stock fundfor growth, and a bond fund forsafety. It’s best if these are asmall-cap stock index fund anda total bond market index fund,but variations will work, too.
For example, an S&P 500 index
fund could work for the stockside, and a government bondfund could work for the bondside.
What funds are available inyour account? Check your401(k) and IRA information tosee. Find the lowest-cost stockand bond index funds available
to you. No small-cap stockindex fund? Go with a different
stock index fund. No index
funds at all? Go with thecheapest stock fund of any type
that’s in your plan.
Once you’ve identified thebest stock and bond funds inyour account, you’re ready.
See “Small Companies forGrowth” on page 80 and“Bonds for Safety” on page 84.

2. Allocate Your Capital

3. Follow The Procedure

For most of your working
life, your target allocation
between the stock and bondfunds will be 80/20.

Once you complete yourinitial purchases, sit tight until
the end of the current calendar
quarter. If you start your planon September 10, you won’t doa thing until the end of themonth or beginning of Octoberas the third quarter ends andthe fourth begins. If you start
your plan on February 10, you
won’t do a thing until the endof March or beginning of April
as the first quarter ends and thesecond begins. No matter when
you begin your plan, click onto
the quarterly schedule
thereafter.

The actual allocation willfluctuate as the market moves
around, which is fine.
You won’t need to rebalance
unless your bond fundallocation exceeds the rebalance
trigger, which is 30% for mostof your life (i.e. a 70/30
division of capital between thestock and bond funds). The
target allocation and rebalancetrigger will change when you
are within ten years of retiring.
See “Adjusting Your Bond
Balance as You Grow Older” onpage 152.
To begin your initial
allocation, find your distancefrom retirement in the table,and your target allocation. It
includes info for people already
retired, as well. Move thecorrect percentage of yourcapital into the stock fund you
selected and the remainder into
the bond fund.
For example, let’s say
you’re more than ten years
away from retirement, with
$85,000 in your Roth IRA, andyour account offers access toiShares S&P SmallCap 600 (IJR)
and iShares Barclays Aggregate
Bond (AGG). You would sellwhatever it is you currently
own to free up all $85K, thenbuy $68,000 worth of IJR and$17,000 worth of AGG.

Not that there’s a lot to doeach quarter. Just follow thefive steps in “The Quarterly
Procedure” on page 160.

4. Add More Cash
Want to add cash to yourplan? Good for you, and noproblem. 3Sig can handle both
regular contributions and onetime lump-sum injections. All
new cash, whether from yourcontributions or dividends paidby your funds, should go into
your bond fund first. At the endof each quarter, you’ll
incorporate half of their value
into the stock-fund balance goalthat will guide your action, theone that uses 3% quarterly
growth as its base.
See “The Modified GrowthTarget” on page 137,
particularly the formula onpage 139.

Things
Three
ThatResources
Will Help You
The 3% Signal: The Investing Technique That Will ChangeYour Life is available everywhere books are sold
The 3Sig Calculator is free. Just plug in your own numbers
and it tells you what to do, at jasonkelly.com/3sigThe Kelly Letter is sent to subscribers every Sunday
morning. It costs $19.97 per month or $236.97 per year.
There’s a two-minute video at jasonkelly.com/letter

I wish you well with this extraordinary investing plan!
Yours truly,

Jason Kelly & Co.
jasonkelly.com