masterwordsmith-unplugged

Is this really the ultimate?

I’ve been updating this article annually for more than 10 years. Not only do we meet those tests, this is simply the best long-term investment strategy I know.

This strategy works in portfolios big and small, doesn’t rely on predictions or require a guru or special knowledge of the markets or economy. And you can implement it using low-cost index funds and exchange-traded funds.

In a nutshell, 60% of the “Ultimate Buy-and-Hold Strategy” is a sophisticated equity portfolio with worldwide diversification including value stocks, small-company stocks and real-estate funds added to a traditional large-cap growth stock portfolio. The rest of the strategy is made up of short- to intermediate-term government bonds.

This strategy is based on the academic conclusion that in the long run, by far the biggest contributor to investment success (or lack of it) is your choice of asset classes. I'll show you, in six easy steps, how to use the best-performing asset classes.

Step One: Start with the basics

Imagine a pie, representing all the money you have invested. Below you can see it represented in a chart showing only two slices, one for stocks (Standard & Poor's 500 Index) and one for bonds (Barclay's Government Credit Index).

CLICK HERE for Paul Merriman's post.