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Mostly Cash For 20+ Years?!?

29 June 2010 No Comment

How absurd in today’s high-octane stock market where stocks like Apple (AAPL), Amazon.com (AMZN) and Research In Motion (RIMM) are all the rage.  Great article today about a top adviser with an excellent track record over the last 30 years.  Charles Allmon has had a model portfolio with about 80% parked in cash for the last 20 years.  During the 90’s dot-com boom, his strategy was considered insane, but the last decade has proven different.

What I find very interestingly from his strategy is that his 20% position in stocks is comprised of just four stocks.  This is very different from the diversification-religion of Wall St. which would have you be 100% in stocks with 100 different stocks for the sake of diversification.  Also, interestingly is that Allmon likes a couple stocks that we talk about at great length: Altria Group Inc. (MO) and Philip Morris Int’l (PM).  Defensive names with high dividends.  Love it.

I enjoy reading stories like this because it’s so counter to what Wall St and the entire financial services industry promotes on a daily basis.  80% cash means less fees for the “experts.”  It’s important to read this stuff because it shows alternative strategies and approaches to investing.  Again, 80% cash for 20 years!  Talk about patience.

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