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 concentrate on what works over a full market cycle, and with a little effort.
Marathon approach: lazy investing re-charged with tactical asset allocation.
This conservative model attempts to blend low cost passive asset allocation with active (driven by value and momentum factors). Remember, there is no one best way to invest for everyone. Always do your homework and don't take any model as investment advice.
Marathon Investor's approach:
- Minimum 20% of assets are in broad index U.S. stock/bond low cost ETFs. This is a 'Lazy Core', which would be rebalanced to the base ~50/50 mix when either asset class gets out of its limits by 500 b.p. of the total portfolio value (e.g. becomes 45 or 55% of the total portfolio). This part reflects the assumption that beating passive and low cost is very difficult in investing.
- The rest of portfolio is really active, mostly based on ETFs, however individual liquid stocks and CEFs can make as much as 25% of total portfolio, and each stock no more than 10%.
- Transactions are done at every week's close of business assuming the closing prices and a virtual commission of USD 7.
- The process behind the active part is based on two proven success factors: value and momentum.
What this newsletter is NOT (disclaimer):
- Not an advice or recommendation to buy or sell any securities. I am sharing my approach for information purposes 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 (which is sometimes indeed 'wrong', but may stay so for a long time). As in medicine, "do no harm" is a fundamental principle before taking an active management route.