The Ignorant Investor

Looking back over the returns from my 401K and investment accounts, what hits me is that I haven't done any of the stupid things that investment advisers say not to do, but I'm still not making much money. I don't trade a lot, I don't jump in and out of funds chasing returns, I don't panic and sell every time there's a market move.

For ten years I've done what all the books say to do: set an asset allocation, then stick with it for the long term. But the basic portfolio allocation of say, 60% stocks and 40% bonds just hasn't been a money maker. All the big, long-term gains over the past ten years has been in gold, stock options, real estate, commodities. All areas where the investment options for individuals are either limited or too perplexing to manage safely.

Yes, I could invest in currency or commodity futures, but I'd have no idea what I was doing and would quickly lose money. I could also have invested large amounts in specialized metal funds, but all the respected books said not to do this. It was the nutjobs that said to put everything in gold. But the nutjobs have won. Kudos to them. Madness worked out.