I don't mind telling you that many of these truths I learned the hard way. You can save yourself a lot of trouble—not to mention a boatload of money—by learning from my experience. As I've told my regular readers, “I've made the dumb mistakes so you don't have to.”
In the pages that follow, I'm going to share with you the best long-term investment strategy I know.
The Gone Fishin’ Portfolio will allow you to successfully manage your money yourself using a simple yet highly sophisticated strategy to increase your returns, reduce your investment risk, eliminate Wall Street's high fees and keep the taxman at bay, too. The idea is simple: Get Wise, Get Wealthy … and Get On with Your Life.
In Part I, Get Wise, we'll examine the challenges you face as an investor. I'll review the fundamental relationship between risk and reward in the financial markets. You'll also get an insider's view of how the investment industry really works.
Get Wealthy, discussed in Part II, means understanding and, I hope, adopting the Gone Fishin’ strategy. You'll learn why this is arguably the safest and simplest way to reach your long-term financial goals. I will also address the financial and psychological challenges you're likely to face in the years ahead.
Get On with Your Life, which we will discuss in Part III, means taking your financial destiny into your hands and, at the same time, reclaiming your most precious resource—your time.
Setting up the Gone Fishin’ Portfolio is a snap. Maintaining it takes less than 20 minutes a year.
You may not believe you're qualified to manage your money yourself. If so, I beg to differ. Investing can be made endlessly complicated, or paint-by-numbers simple. If you keep things simple, you're perfectly qualified to manage your money yourself—and in a highly sophisticated way.
As an investor, your overriding goal is to achieve and maintain financial independence. Your savings are the fuel. The Gone Fishin’ Portfolio is the vehicle to get you there.
Let's get started.
ACKNOWLEDGMENTS
The Gone Fishin’ Portfolio wouldn't have been possible without the help of countless people along the way.
It has been my exceptional good fortune to work with Bill Bonner, Mark Ford, Julia Guth, Steven King, and my other colleagues, mentors and good friends at Agora Publishing.
I'd like to thank Kristin Orman, Andrew Hubbarth and Nancy Hull for their many hours of research for the book.
Many thanks to Christina Grieves and Anne Mathews for their exceptional copyediting.
Thanks, too, to the folks at John Wiley & Sons for suggesting a revised and updated edition of the book and for reviewing the manuscript.
I would like to also express my gratitude to longtime subscriber Bill O'Reilly for his generous endorsement of my work and for writing the Foreword.
And thanks, as well, to our many Oxford Club Members and Liberty Through Wealth readers.
Carpe Diem,
Alex Green
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