The Gone Fishin’ Portfolio: The Best Low-Cost, Tax-Efficient Investment System

by Alexander Green, Advisory Panelist

Seven years ago, I created The Gone Fishin’ Portfolio for The Oxford Club.

The goal was to develop a low-cost, tax-efficient investment system based on the only strategy to ever win the Nobel Prize in Economics.

The portfolio has generated high returns with low risk while doing a complete end run around Wall Street’s high-priced products, self-serving advice and mountain of fees. Yet it is so simple to implement that you can do it yourself in less than 20 minutes a year.

Still, a lot of investors just don’t get it.

A prime example is a Mr. Talmadge O’Neill. Posting a customer review of my book “The Gone Fishin’ Portfolio” on Amazon, he writes that the portfolio “is only going to give you the basic market return. Nothing fancy. We’re not talking endowment returns.”

It’s true that

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Every correction is the same, a normal downturn in one or more of the markets where we invest. There has never been a correction that has not proven to be an investment opportunity. You can be confident that governments around the world are not going to allow another Great Depression “on their watch”.

Every correction is different, the result of various economic and/or political circumstances that create the need for adjustments in the financial markets.
While everything is down in price, as it is now, there is actually less to worry about. When the going gets tough, the tough go shopping.

In this case, an overheated real estate market, an overdose of financial bad judgment, and a damn the torpedoes stock market, propelled by demand for speculative derivative securities and Hedge Funds, finally came unglued.

But it is the reality of corrections that is …

Now more than ever, you can appreciate the need for comprehensive investment education. All of a sudden, fifty percent of your nest egg has disappeared— and the bad news? There never was a plan for income generation. Ouch!

Dwelling on coulda’s, woulda’s, and shoulda’s isn’t going to rebuild your portfolio. Attempting to become proficient in the speculation of the month will do little to decrease the long-term pain. Casting blame on government regulators and Wall Street scam artists does little to grow retirement income.

There are at least three things you can do to protect yourself now, and throughout your more quickly approaching than you realize retirement years:

(1) Actively support income tax code replacement surgery, be it Flat Tax, Fair Tax, or a combination; (2) actively support a Social Security reform plan with smaller mandatory contributions, higher guaranteed benefits, and trustee managed income …

As if the market and economic environment were not making managing the Focus List tough enough, wildcard events keep occurring.

The latest came from Mantech International (MANT). President Robert Coleman abruptly resigned on Tuesday afternoon. There was no named successor or any rationale for his departure. (Even the SEC filing does not provide any explanation.)

Needless to say, we sold the stock.

Part of the risk inherent in investing is the chance of unexpected events occurring. During the past 2 months, it certainly feels like we have seen more than our fair share. For example, there was no way to predict that Multi Fineline Electronix (MFLX) would flip-flop on its guidance in a period of just 5 weeks.

During a bull market, it's easy to weather unusual events because the rest of the portfolio is performing well. But bear markets amplify the bad news.

The key

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“My wife was trying to sleep and she’s waking up and saying “What’s wrong with you?” What could I tell her, that I was cracking up over a financial book—?”

“As I approach retirement in a few years, I’m very encouraged by the cash flow my portfolio can generate. If I can generate nearly 8% cash flow in the worst bear market in 70 years, and with minimal capital gains, I’m feeling pretty good about the future.”

In the midst of financial crisis, market upheaval, and world-class uncertainty, at least one financial book provides an easily implemented strategy for safer investing. The Brainwashing of the American Investor is more than just “the book that Wall Street does not want you to read”.

It’s a book that might have helped you avoid many of the errors that have made this crisis so painful at a …

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There has never been a correction that has not proven to be an investment opportunity. While everything is down in price, there is actually less to worry about than when prices are historically high. More money has been lost by people who bought into last year’s markets than by those who will buy into this one, at this stage of the correction. When the going gets tough, the tough go shopping.

Every correction is different, the result of various economic and/or political circumstances that create the need for adjustments in the financial markets. This correction is worse than most that I’ve experienced, but the doom and gloom scenarios many have been pushing are unlikely to come to fruition. Once the media elects a new president, they’ll just have to start reporting better news: 96% of all mortgages are current sounds a whole …

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report One of the things people don’t understand about buying gold for diversification is that it doesn’t work all the time. It works over time. That means that you can’t simply switch from one asset class to another when the going gets tough and expect miracles. Nor can you expect higher returns. And that’s the really cruel part. Many so-called alternative investments, gold being the most notable, are being sold right now on the basis of recent high returns to salivating investors desperate to stop the bleeding in their portfolios. No question, the yellow metal offers diversification; but near all time highs, its “protection” is debatable at best, when viewed against the harsh light of historical data. Which is why, at the risk of receiving some very testy email, we have to point out that if you bought ...

Fellow Stockmasters, just came across this great article on the Motley Fool about Analyst estimates. Good read: It is a pervasive myth that has left the savings of countless small investors in ruins. More likely than not, it is a piece of information you've relied on while making ...

I went on to do a few more indices, namely KOSPI, HSI, Nikkei 225, BSE, FTSE, JKSE and plotted them on the following chart together with STI and S&P 500.

JKSE and KOSPI are the two best performing market indices on a 10-yr annualized basis and Nikkei 225 and FTSE are the two worst performers. For simplicity sake, if $1,000 is invested in every of the above indices, the portfolio would be something like this:-The $8,000 portfolio would have grown to $24,769 today (since 1998), an annualized returns of 11.96%.

Invest in…