Alexander Green - The Gone Fishin' Portfolio

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.

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

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.