Putting the Gone Fishin' Portfolio to the Test

The Gone Fishin' Portfolio is a long-term investment approach, not a short-term trading technique. It is based on a Nobel Prize-winning strategy of asset allocation. It is made up of 10 noncorrelated assets through mutual funds or exchange-traded funds.

But what is the best allocation? We can only know in the luxury of hindsight. No one can consistently predict which years will be good and which ones bad. The key is to accept this uncertainty and asset allocate. In other words, divide your portfolio among various, noncorrelated investments. (In technical terms, some investments will zig when others zag.) This way, it doesn't really matter which asset class performs best this year or next year.

With 40% of assets outside traditional equities, this is not an all-stock portfolio. The Gone Fishin' approach is considerably safer than putting all your eggs in the stock market, something advisable only for those with a very long time horizon, a high tolerance for risk, loads of patience and fortitude, and extraordinary optimism about the future. (In other words, almost no one.)

To calculate the portfolio’s annual returns, The Oxford Club rebalances the portfolio on the last business day of each year. Although the Gone Fishin' Portfolio lagged the S&P 500 during some years, it certainly hasn't since its inception 18 years ago.

If you had invested $100,000 in the Gone Fishin’ Portfolio in 2003 – the year Alexander Green created it – it would have turned into $468,446 at the end of 2020.

Gone Fishin' Portfolio Chart

Here are the annual returns - verifiable through the individual mutual funds and exchange-traded funds.

Gone Fishin' Portfolio Table

As you can see, the Gone Fishin' strategy works. And we have almost two decades’ worth of validated, real-world returns to prove it.

In his 20 years as Chief Investment Strategist of The Oxford Club, Alex has repeatedly reminded our Members that investment success is not about following the right predictions; It's about following the right principles.

That means asset allocating properly, diversifying broadly, minimizing expenses and taxes, and rebalancing annually. It may not be as exciting as an afternoon at Churchill Downs, but it does have one big benefit: It allows you to spend your time doing what you really want.

Calculate what that's worth.