This is exactly the way I have interpreted it and one reason I like the idea of the Golden Butterfly. I am not new to investing, have been investing for over a decade, but I suck at it overall (5% return average), so I just want the safest, highest return possible. Every time I think I get it right, more information makes me doubt. This debate is one of those, I enjoy a debate about most things, however, this subject scares me as I hate work so very much that the possibility to retire early in just 6 more years is the only thing that keeps me going with this fake corporate smile. This is just one area in my life I would like to actually get right.
Hi Effigy. I understand your confusion and frustration.
This is a point where I do agree with Interest Compound. If anyone finds themselves confused by the details of this discussion and overwhelmed by all of the options, then IMHO the best first step is to invest in the
Classic 60-40 portfolio (or something similar). It has been around forever, and while it does have its tradeoffs (as all portfolios do) there are huge
support communities to help you stay the course. And if you choose to build on it later, those two funds will be the foundation of almost any future portfolio you'll grow into. Don't let the search for the "perfect" portfolio stop you from getting off the starting line. Investing is a journey, not a switch.
If after getting comfortable you decide you want to learn more about alternative assets and how they might augment your portfolio performance in some way then that's great. Research and learn, but don't act hastily -- take it one step at a time. A common next step is to look at international stocks (like the
three-fund portfolio). After that, some people like
Rick Ferri add a fourth uncorrelated asset like REITs. Others like
Bill Schultheis take it a step further and subdivide the stocks a bit. You get the idea -- many portfolios that look very different on the surface are actually built on the same foundation and are easy steps from where you started.
But importantly, while some of the more sophisticated portfolio concepts are definitely interesting and have a lot of smart people backing them,
none of those extra steps are required! I'm a full believer that one should never invest in anything they do not understand. Just sticking with the broad stock and bond markets is a perfectly valid investing method suitable for many people.
Regarding your frustration with work, I also totally empathize. I've been there. In my experience, looking to the markets to make you happy will always let you down no matter how you invest. The solution for that is a lot bigger than asset allocation. That's what MMM is all about!