I can’t remember having had such a difficult time finishing a book that I really liked, but Money: Master the Game by Tony Robbins is wearing me out. There is just too much fluff and not enough stuff to justify over 600 pages. Note: I have finally reached page 524. The end is near. Still, I recommend this book as an excellent primer for the novice investor in search of financial freedom. Tony has done his homework. I understand that he is a motivational speaker attempting to lead his readers into, “Taking massive action,” that will change their lives, but 350 pages would have been overkill. I really would like to attend one of his live events some day. Although, if I am offered the opportunity to do some fire walking, I think I will pass. I bet his shows really are unforgettable, but it just doesn’t work for me on the printed page. After spending over 300 pages on the gospel according to John C Bogle (an age appropriate mix of low cost index funds) Robbins spends some time looking at other options that might be suitable for his readers after they have passed something on the order of the $2 million dollar mark. He also presents the obligatory model portfolios. One is the well known “Yale” portfolio developed by David Swensen, the stunningly successful Chief Investment Officer of Yale University. This portfolio has been covered in many places including this blog, but for those of you who haven’t seen it, here it is again. 20% Wilshire 5000 Total Market TR (total return) USD (US dollars)
20% FTSE NAREIT All REITs TR
20% MSCI ACWI Ex USA GR USD (Morgan Stanley Capital International All Country World Index)
15% Barclays US Long Credit TR USD
15% Barclays US Treasury US TIPS TR USD
10% MSCI Emerging Markets PR USD
The other model portfolio present in this book was developed by Ray Dalio, manager of the world’s largest hedge fund. I haven’t seen this information presented anywhere else. It is remarkable for its simplicity, yet it back tests in all investment climates back to before the Great Depression.
30% Stocks (S&P Index and other Indices)
15% Intermediate Term US Treasury Bonds (seven to ten year maturity)
40% Long Term US Treasury Bonds (twenty to twenty five year maturity)
Dalio believes that if an investor is diligent in maintaining this balance, he has truly developed a portfolio for all seasons. Yes. He does put his money where his mouth is.
I enjoy reading about model portfolios. Although my portfolio, while appropriate for my age and circumstances, (I hope) just kind of grew as I saved and learned more about investing. I have consciously taken actions to rebalance it from time to time, usually when I get nervous. I also have learned I don’t need to rebalance it every time I get nervous. I am a little worried that the readers of this book might get carried away with Robbins’s extraordinary enthusiasm for everything he mentions. Don’t believe in silver bullets. They don’t exist. No one can predict the future. Still, both those model portfolios are pretty interesting and have proven their worth IN THE PAST.
As always, “Let’s be careful out there.”