I blog about money/investing periodically, mostly to express my frustration with the standard model we're all taught: Buy low-cost, indexed mutual funds; diversify across investment styles, regions of the world, industries, levels of market capitalization, etc.; just hang in there when you lose 40% of your wealth in a bear market; and pray to God that you don't experience one of those 40% nosedives when you're about to retire.
For years I've been looking for something better that wasn't hocus-pocus or get-rich-quick. I've even spent considerable time trying to develop something better myself...only to decide that getting such a thing right was not just a full-time job, it was an entire career.
Finally, I settled on a different approach. I decided to subscribe to a publication called the Hulbert Financial Digest. It's an investment meta-newsletter, that is, it's a newsletter about investment newsletters.
Investment newsletters are a dime a dozen, and they're unregulated; anyone can start one and make whatever crazy claims they want. ("When you were losing half your cash in 2008, we made 30%!") What Hulbert does, among other things, is track various newsletters' performance over time. That is, he determines the risk-adjusted return on the portfolios recommended by the newsletter writers, and then he publishes the results. So, if you're interested in subscribing to a newsletter for investment guidance, Hulbert can help you decide which one (or ones) to pick.
Well, cutting to the chase, long story short and all that, having read the Hulbert Financial Digest's most recent ranking of newsletter performance, I decided to subscribe to a newsletter called No-Load Mutual Fund Selection and Timing.
The guy who writes it has beaten the Wilshire 5000 over the past 15 years by about a percentage point, and has done so at substantially lower risk than you'd incur if you just held a broad market index fund. Over 20 years, he's lagged behind the market by about half a point, but again, at a much lower level of risk. (In 2008, for example, his main recommended portfolio lost about 6%. Compare that to the Wilshire 5000, which lost more than 35%.)
To get these results, you only need to hold 7 or 8 funds; you'll be trading here and there, but on average, you'll be holding each fund for about a year before you dump it. Not bad.
There's no hocus-pocus here, either. The mutual fund recommendations are derived from an almost purely quantitative exercise that determines which funds are performing best within various investment categories (e.g., large cap domestic funds, emerging market funds, etc.). You buy and hold the top-performing funds until they're no longer top performers. At that point, you sell the funds and buy the ones that have replaced them in the performance rankings.
I'll stop there. It cost me about $240 and a lot of time to arrive at the conclusion that following this particular newsletter was a sensible, conservative way of managing my retirement funds in highly uncertain times, with minimal thought/effort on my part. I'm telling YOU all of this so that you don't have to replicate the research I've done or spend all of the money. Instead, you can go right to the link I gave above and see if you think the newsletter might be what you're looking for, too.
Footnote: In case you're wondering, no, I don't get any money from this...no referral fees, nothing like that. Just trying to do a little public service here.
