Why Marathon Investor?

Absolute return and long-term capital growth is what really matter to most of us, no matter what the financial industry and the media are saying. When it comes to money, survival is more important, than short term success, which can be a result of market conditions of the last several months (or years!), and can be wiped out easily in a course of 3-6 months. To be a marathon investor you need to concentrate on what works in _any_ conditions, over a full market cycle, and with less effort.

Marathon approach: lazy investing re-charged with tactical asset allocation.

In the world of ever expanding choices, investing becomes... more simple. It's an illusion that you have to work hard to succeed investing your money. Many people seek best performing stocks or best asset managers. Asset managers hardly keep up with indexes/benchmarks. Marathon Investor (MI) follows a different route. 80% of efforts can be saved by simple asset allocation strategies, which MI shares with you. Of course there is no one best way to invest for all. You might consider using similar approach in your asset allocation or add it as a bucket along your core portfolio.

Marathon Investor's recipe is simple:

1. Global diversification and indexing. Let the world work for us 24/7, and thou shall not bother which country, sector or stocks to pick. Let the indexes select the survivors. Emphasize asset classes instead. Industries come and go; political and economic regimes rise and fall; asset classes are here to stay for generations. That's why asset allocation (mixing asset classes properly together) is at the core of the marathon approach.
2. Buy, hold, re-balance -- there is nothing new about lazy investing.  It just works, no matter what you hear in the aftermath of meltdowns. You only need to buy quality asset classes and stay the course to earn a real (after inflation) premium for your patience, with some decent degree of certainty.
   
3. On the other hand, we are humans, and there is few of us who really have a long enough time horizon or who can stomach a 50% draw down in account value. That's why I have made some modifications to classical lazy investing (i.e. included strategies to preserve gains and limit losses).
4. The modifications include the two major forces that proved to work in the markets (i.e. enhance risk-adjusted returns): trend-following (or, momentum) and value (or, mean reversion).

Continue reading

See also Finsovet blog (in Russian, since 2007)