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The Gone Fishin' Portfolio

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The Gone Fishin' Portfolio

Get Wise, Get Wealthy...and Get on with Your Life

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Survive Wall Street, achieve your investment goals and secure your financial independence.

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Editorial Rating

7

Qualities

  • Applicable
  • Well Structured
  • For Beginners

Recommendation

getAbstract recommends this excellent, straightforward, hype-free and solidly grounded guide to investing. Research analyst and investment adviser Alexander Green draws on portfolio management methods used by the world’s biggest institutional investors. He goes straight to the basics, emphasizing financial discipline, saving and awareness of costs. The portfolio he recommends consists entirely of low-cost Vanguard mutual funds, mostly index funds. He recommends keeping 70% of your portfolio in stocks. That recommendation may seem risky, especially in view of volatile stock market performance. However, he cites historical and financial research to demonstrate that, over time, equities have been the highest returning class of investments, even during such catastrophes as the Great Depression. This kind of straight talk is an excellent prophylactic against both the panic of crashes and the euphoria of bubbles.

Summary

Money Facts

The following investing tactic can make you financially independent, which is why institutional investors use it to manage some of the world’s biggest portfolios. In 1990, the thinkers who discovered the principles behind this approach, Merton Miller, William Sharpe and Harry Markowitz, won Nobel Prizes in Economics for their ideas. Their approach to asset allocation underpins the Gone Fishin’ Portfolio strategy. In Portfolio Selection, a seminal paper, Markowitz explained the way that “a portfolio constructed of uncorrelated assets can allow you to master uncertainty and generate excellent investment results.” He laid out “the concept of the efficient frontier, the point where you are generating the best returns within a given level of risk.”

First, be smart. Understand that no one knows exactly the right asset allocation pattern in advance. Don’t take chances with your money. Save. Don’t rely on the government or anyone else to manage it. Social Security will help you retire, but you probably don’t want to live on it. Even the U.S. government admits that the current system will be untenable in the future. The population won’t include...

About the Author

Alexander Green is the Investment Director of the Oxford Club and Chairman of Investment U, an Internet-based investment research service.

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