The Gone Fishin' Portfolio by Alexander Green

Author:Alexander Green
Language: eng
Format: epub
Publisher: Wiley
Published: 2010-05-11T04:00:00+00:00

PUTTING THE GONE FISHIN’ PORTFOLIO TO THE TEST

The Gone Fishin’ Portfolio—rebalanced annually—has compounded at 17.3% annually in the five years since I created it in 2003. That’s considerably better than the return of the S&P 500 over the same period. And it was less risky than being fully invested in stocks. (After all, 30% of our portfolio is in bonds.)

Of course, a lot of investment strategies work in a rising market. Yet they often lag when the market takes a tumble. However, the Gone Fishin’ Portfolio would have beaten the S&P 500 every year in the last bear market, too.

If you had owned it in the bear market of 2000 to 2002, for example, you would have seen it decline 6.1% in 2000, 2.7% in 2001, and 5.4% in 2002.

These are temporary declines that most investors can live with. The S&P 500, by contrast, fell harder: down 10.1% in 2000, down 13% in 2001, and down 23.4% in 2002. (See Figure 8.1 and Table 8.2.)

FIGURE 8.1 Gone Fishin’ Portfolio vs. S&P 500 from 2003 to 2007

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