The Gone Fishin' Portfolio

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

Alexander Green

• Verlag: Wiley
• Jahr: 2021
• ISBN:
  9781119817857
• Auflage: 2
• Thema: Negocios y empresa
• Thema: Inversiones y valores

Learn how to invest, relax, and let your money do the work with this incredible guide

Fully revised, updated, and expanded for the first time since its New York Times Best-Selling debut in 20TK, the legendary Alexander Green's essential guide for individual investors spells out stock-market success for everyone from first-timers to seasoned pros.

The Gone Fishin' Portfolio: Get Wise, Get Wealthy…and Get on With Your Life, Second Edition delivers a long-term investment strategy that lets you reap the rewards of financial success with a simple, yet sophisticated, strategy that increases returns, reduces risk, and leaves you with time to enjoy the finer things in life.

You'll learn about the fundamental relationship between risk and reward in the financial markets and get a trading insider's view of how the investment industry actually works. With The Gone Fishin' Portfolio, you'll also discover:

• How to take your financial future into your own hands
• How to invest in a way that doesn't require you to spend every waking moment worrying about your money
• How to avoid the most common traps the investment industry sets for you
• Why skilled investing doesn't have to be complicated

Perfect for individual investors who want to put their money to work for them, The Gone Fishin' Portfolio gives you all the tools you need to manage your own money and maximize your investment returns today.

PART I
Get Wise

Introduction

As an investment analyst, I speak frequently at investment conferences across the United States and around the world.

The attendees come for a number of reasons. Some want to gain insights on interest rates, the dollar or the stock market. Others are seeking new investment strategies. Still others are looking for good investment ideas or, as one gentleman insisted, “just one great stock.”

But before you can put your money to work effectively, you need something even more fundamental to your success: a philosophy of investing.

In her book Philosophy: Who Needs It, Ayn Rand argues that all of us have a philosophy of life, whether we know it or not. “Your only choice,” she writes, “is whether you define your philosophy by a conscious, rational, disciplined process of thought … or let your subconscious accumulate a junk heap of unwarranted conclusions.”

What's true of life is also true of investing.

Over the past two decades, I've dealt with thousands of individual investors, some highly astute, some rank novices. Many had only the foggiest notion of what they were trying to achieve—or how. In some ways this is understandable. World markets are complex and the investment process can be daunting.

Beginners often don't understand the fundamentals of saving and investing. And even more experienced investors are often stymied by the complexities and technical jargon surrounding the investment process. Many try (and inevitably fail) to outguess the markets—or simply wave the white flag and turn their portfolio over to “that nice young man down at Merrill Lynch.”

Big mistake.

No one cares more about your money than you do. With a basic understanding of the investment process and a bit of discipline, you're perfectly capable of managing your own money, even your “serious money.” Especially your serious money. By managing your own money, you'll be able to earn higher returns and save many thousands of dollars in investment costs over your lifetime.

The Gone Fishin’ Portfolio rests on a powerful philosophy of investing. It's battle-tested. It's built on the most advanced—and realistic—theories of money management. And it works.

Moreover, this book does something that virtually no other investment guide does. I'm going to show you—very specifically—where to put your money. And then I'm going to show you how to manage it year after year.

Once you've set up your portfolio, the whole process will take less than 20 minutes a year to implement. This may sound like an audacious claim. But, as you'll soon see, the strategy itself is steeped in humility.

It is based on the only realistic premise for an investment philosophy—that, to a great extent, the future is unknowable. So don't expect me to draw on my gift of prophecy and tell you what's going to happen to the economy, interest rates, the dollar or world stock markets. (No one is more surprised than me how the market action unfolds each year.) Nor will we ignore uncertainty or pretend we have a system that has eliminated it. Instead, we're going to use uncertainty and make it our friend. In short, we're going to capitalize on it.

Investing is serious business. Getting it right is the difference between a retirement spent in comfort (or luxury) and spending your golden years counting nickels, worrying whether you'll have enough. The difference could hardly be starker.

Up until now, you may have been tempted to turn your investment portfolio over to someone else to manage. After all, your financial security is paramount. You may not think you can take the risk—or handle the responsibility—of running your money yourself. I fully intend to disabuse you of that notion. I also want to point out that there are serious risks to turning your money over to someone else. That person may manage it poorly. Or be terribly expensive. Or both.

If you're skeptical on this point, it may be that you've bought the story that Wall Street is selling: Investing is so complicated—or your personal circumstances so exceptional—that you should not be trusted to run your own money.

I'll concede that if you don't know what the heck you're doing, this is true. But one solution is learning what to do, rather than turning your financial welfare over to someone else.

When it comes to managing your money, there are plenty of potential pitfalls out there. However, those investors who wind up in retirement with less money than they need have generally fallen prey to one of four basic mistakes:

1. They were too conservative, so their portfolio didn't grow enough to begin generating the income required to meet their spending requirements.
2. They were too aggressive, so a significant percentage of their portfolio went up in flames along the way.
3. They tried—and failed—to time the market. Confident that they would be in for market rallies and out for market corrections, they ended up doing just the opposite much of the time.
4. They delegated unwisely. They turned their financial affairs over to a broker, insurance agent or financial planner who—over time—converted a substantial amount of their assets into the firm's assets. In addition, the advisor may have been too conservative, been too aggressive, or tried and failed to time the market.

If your nest egg is lying in pieces late in life, you don't have the opportunity—or the time—to build another one. The consequences, both personal and financial, can be devastating.

Planning your financial future is a momentous responsibility. The Gone Fishin’ Portfolio will enable you to handle your serious money—the money you need to live on in retirement—in a serious way.

There are few guarantees in the world of investing. In fact, once you get beyond the risk-free world of Treasurys and certificates of deposit, there are virtually none. However, the Gone Fishin’ Portfolio eliminates six major investment risks:

1. It keeps you from being so conservative that your long-term purchasing power fails to keep up with inflation.
2. It prevents you from handling your money recklessly.
3. It does not require you to own any individual stocks or bonds. So a single security—think Enron or Shearson Lehman—cannot cause your portfolio to crater.
4. It does not require a broker, financial consultant or anyone else to attach himself to your portfolio like a barnacle, siphoning off fees every year.
5. It doesn't require you—or any investment “expert”—to forecast the economy, predict the market or analyze competing economic theories about the future.
6. Perhaps most importantly, it guarantees that your time will be your own. Rather than spending countless hours evaluating stocks, market trends or fund managers, you'll spend your time as you please. While others struggle to manage their money effectively, you'll have “gone fishin’.”

This last point means that instead of spending countless hours fretting over your investment portfolio, you'll be able to relax … play golf … travel the world … spend more time with your kids or grandkids … or just swing on a hammock in the shade with a glass of ice-cold lemonade. Because your investments will be on autopilot.

This is not just a strategy for today's markets, incidentally. The Gone Fishin’ Portfolio is designed to prosper—and generate peace of mind—through all market environments. And I invite you to be skeptical. In fact, let me begin by asking you a question.

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If I could show you a way to manage your money yourself, using a strategy that is as powerful and effective as any used by the nation's top institutions, that will allow you to outperform the vast majority of investment professionals, pay nothing in sales charges, brokerage fees or commissions, that will take less than 20 minutes a year to implement, and that is based on an investment strategy so sophisticated it won the Nobel Prize in economics, would you be interested?

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I hope so. That, in a nutshell, is the Gone Fishin’ Portfolio. It's about handling the money you intend to retire on simply, effectively and cost-efficiently, with the absolute minimum of time and attention.

If you're like most people I know, you have better things to do than watch your stocks bounce up and down all day.

Don't get me wrong. I'm not averse to trading stocks. (Long-term investing and short-term trading are not mutually exclusive activities.) But short-term trading strategies are beyond the scope of this book. Instead of focusing on trading or speculating, we're go...