Mostly Cash For 20+ Years?!?
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.