Alexander Green proposed this The Gone Fishin’ Portfolio which was outlined in his book ‘The Gone Fishin’ Portfolio’. Based on the book, the following is the allocation using Vanguard low cost index funds (in the popular Bogleheads forum, there is a discussion thread devoted to this portfolio):
Vanguard Total Stock Market Index (VTSMX), (ETF: VTI) – 15%
Vanguard Small-Cap Index (NAESX) (ETF: VB) – 15%
Vanguard European Stock Index (VEURX) (ETF VGK) – 10%
Vanguard Pacific Stock Index (VPACX) (ETF VPL) – 10%
Vanguard Emerging Markets Index (VEIEX) (ETF VWO) – 10%
Vanguard Short-term Bond Index (VFSTX) (ETF BSV) – 10%
Vanguard High-Yield Corporates Fund (VWEHX) (ETF HYG) – 10%
Vanguard Inflation-Protected Securities Fund (VIPSX) (ETF TIP) – 10%
Vanguard REIT Index (VGSIX) (ETF VNQ) – 5%
Vanguard Precious Metals Fund (VGPMX) (ETF XME)- 5%
It is rebalanced once a year. MyPlanIQ maintains this static or lazy portfolio here.
This portfolio should be compared with this plan’s SAA or TAA growth portfolios as it has 20% safe fixed income exposure and in MyPlanIQ, we classify High Yield bond as a risky asset.
MyPlanIQ has an investment plan Alexander Green`s Gone Fishin ETF Portfolio that is made of the ETFs used in the above portfolio. Two asset allocation portfolios that are based on strategic and tactical asset allocation strategies (SAA and TAA) have been monitored for several years now.
Strategic Asset Allocation is based on well known modern portfolio theory and its key features include: diversification, proper fund selection and periodically re-balancing.
Tactical Asset Allocation works on a diversified array of assets provided by funds in a plan and adjusts asset mixes based on market conditions such as asset price momentum utilized by TAA.
The following shows how the portfolios have performed (as of 1/8/2013):
|Ticker/Portfolio Name||1Yr AR||3Yr AR||5Yr AR||5Yr Sharpe||10Yr AR||10Yr Sharpe|
|Alexander Green`s Gone Fishin ETF Portfolio Strategic Asset Allocation – Optimal Moderate||8.8%||7.0%||11.7%||0.84||6.6%||0.4|
|Alexander Green`s Gone Fishin ETF Portfolio Tactical Asset Allocation Moderate||12.6%||8.6%||10.7%||1.07||9.5%||0.82|
|Alex Green The Gone Fishin Lazy Portfolio||8.0%||4.3%||11.3%||0.74||6.7%||0.38|
|VBINX (Vanguard Balanced Index Inv)||15.4%||10.4%||12.6%||1.07||6.8%||0.47|
The lazy portfolio was hurt by its diversification in its exposure in emerging market stocks and precious metal fund. However, it has been fairly competitive in the last 10 year time frame.
To be fair, the gone fishin portfolio should be compared with this plan’s SAA or TAA growth portfolios as it has 20% safe fixed income exposure and in MyPlanIQ, we classify High Yield bond as a risky asset.