The 5 Mistakes Every Investor Makes is a recent book I read by Peter Mallouk, the #1 Investment Advisor in America.  (I’m not poking fun, that’s just what it says on the cover.)  In general it is an easy-to-read book that offers quite reasonable advice, and you can get a free copy from their website.

The five mistakes are:

  1. Market Timing
  2. Active Trading
  3. Misunderstanding Performance and Financial Information
  4. Letting Yourself Get in the Way
  5. Working with the Wrong Advisor

I mostly agree with these 5 mistakes, to which I would add the #1 mistake of all is paying too much in fees.  Their firm Creative Planning, which Tony Robbins just joined as Chief of Investor Psychology, charges 1.2% for first $500k, 1.0% up to $2mm, and still 0.70% on assets of $25,000,000.  That is on top of ETF/mutual fund fees and transactions.  So, high for a financial planner.  But like I’ve always said, if a planner can keep you from making all the above mistakes, as well as offering other valued added services, they are worth their weight in gold.  (A random aside, the domain also reroutes to their site…)

Anyways, none of this is the point of the post.  Rather, we like to cover guru recommended allocations, and the below stats are similar to the allocations I wrote about in my GAA book, and similar to an old post we did on the Tony Robbins allocations. The author proposed a few allocations where I will show performance back to 1973.  Here are the portfolios:

1.  I Want to Beat the Market Portfolio

25% Emerging Market Stocks

25% International Stocks

25% US Large Cap Stocks

25% US Small Cap Stocks


2.  I Need 7 Percent to Hit My Long Term Goal Portfolio

15% International Bonds

25% US Bonds

25% US Large Cap Stocks

15%  US Small Cap Stocks

20% International Stocks


3.  Get Me What I Need for the Rest of My Life with the Least Volatility Possible Portfolio

20% International Bonds

40% US Bonds

20% US Large Cap

10% US Small Cap

10% International Stocks


4.  I Have More Money Than I Will Ever Need and I Want It to Grow with Minimal Volatility Portfolio

70% US Bonds

20% International Bonds

10% US Large Cap


Pretty basic lazy portfolios, and if you read the book you know my conclusions already…

Click to enlarge