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Why Marathon Investor?
This is only one approach to investing - a virtual primer of a balanced portfolio combining long-term passive and tactical active investment strategies, based on the following principles:
- Minimum 20% passive long-term allocation: low cost broad index U.S. stock and bond ETFs. This is a so called 'lazy core', which would be rebalanced to the base ~50/50 (or 10%/10% of the total portfolio value) mix when either asset class gets out of its limits by 500 b.p. of the total portfolio value (e.g. becomes 15 or 5% of the total portfolio value). This allocation reflects the assumption that beating passive and low cost vehicles is very difficult in investing, i.e. long term, the markets are really efficient in pricing securities.
- Active tactical allocation driven by return factors such as value and momentum: implemented mostly by ETFs. Individual liquid stocks and CEFs can make as much as 25% of total portfolio, and each stock no more than 10%. This approach emphasizes market inefficiencies in pricing securities and is based on academic research. This allocation is about 80% of assets compiled from the universe available in the U.S. exchanges and might include big cash positions at certain times.
- Transactions are done at every week's close of business assuming the end of day prices and a virtual commission of USD 7. Reporting and updates are published weekly, typically on Sundays. I use Morningstar to track the portfolio (including dividends, splits, interest etc.).
Always do your homework
This conservative model may be out of sync with any benchmark, and you should expect under- and over- performance with your benchmark for prolonged periods of time, however the Marathon Investor's goal is to beat iShares AOM ETF (passive moderate risk World asset allocation) over a full market cycle. This is of course not a guarantee, but yet another attempt to marginally improve on passive investing. Remember, there is no one best way to invest for everyone. Always do your homework and don't take this or any other model as investment advice (read more in Disclamer below).
I am a Moscow-based investor with a day job. I think about the markets usually while commuting and on weekends. It is on weekends that I check/update my portfolio and set the orders for the upcoming week. I started as a Russian mutual fund investor in 1999, I went for an ETF portfolio late in 2007. Having survived the 2008/9 meltdown I love sharing the way I invest, earlier and a lot in my Russian blog and now -- through this site, twitter @finsovet, StockTwits network and SeekingAlpha.com. I am long some of the Marathon Investor holdings.
What this newsletter is NOT (disclaimer):
- Not an advice or recommendation to buy or sell any securities. I share my approach for information only. You are encouraged to contact your financial adviser and do your own due diligence, taking into account your objectives and personal circumstances.
- Not a forecast. I believe forecasting financial markets is a waste of time. I share my views as well as interesting opinions of trusted experts for entertainment and information purposes only. Some of these views impact my asset allocation, which I disclose. You are encouraged to study carefully any assumptions/opinions and consider limitations of out-guessing the market. As in medicine, "do no harm" is a fundamental principle before taking an active management route.