In the investing world, a gone-fishing portfolio is a simple asset allocation which performs well with only infrequent rebalancing.
We have been offering the Marotta’s Gone-Fishing Portfolio since 2012 as a free portfolio recommendation intended for people who are just getting started with investing. This portfolio has a limited number of investments with a balanced asset allocation that should do well with dampened volatility. Its primary appeal is simplicity, but a secondary virtue is that it avoids the worst mistakes of the financial services industry.
Last year, our 2024 Marotta’s Gone-Fishing Portfolio was a recommendation of 12 stock investments. It is a paired down version of our actual managed investing strategy, which has over 40 low-cost ETFs to target over 30 sectors.
This article is to report on the 2024 performance of those twelve stocks.
In this analysis, we have used returns ending December 31, 2024 as reported by Morningstar. For the portfolio, we have used the 100% Stock allocation invested at the start of the relevant period and then permitted to drift throughout the period.
Overall Returns
| Ticker | 3-Month | 6-Month | 9-Month | 1-Year | |||
|---|---|---|---|---|---|---|---|
| iShares MSCI ACWI | ACWI | -0.85% | 5.46% | 8.54% | 17.46% | ||
| All-Stock Default Gone-Fishing | -3.84% | 3.77% | 5.98% | 11.21% | |||
| All-Stock Default Vanguard Gone-Fishing | -4.38% | 3.58% | 4.49% | 10.72% |
Without rebalancing, the all-stock Marotta 2024 Gone-Fishing Portfolio had a 1-year return of 11.21% and the all-stock Marotta Vanguard 2024 Gone-Fishing Portfolio had a 1-year return of 10.72%.
For comparison, iShares MSCI ACWI ETF (ACWI) saw a 2024 return of 17.46%. MSCI ACWI All Cap represents every stock in the world at exactly its cap weight. Any deviation from this index is a choice of investment strategies. Sometimes those choices will increase or reduce risk. They may also increase or reduce returns.
This past year, our choices decreased returns for both our default and Vanguard portfolios.
U.S. Stock Returns
| Allocation Vanguard | Default | Ticker | 3-Month | 6-Month | 9-Month | 1-Year | ||
|---|---|---|---|---|---|---|---|
| Vanguard Total Stock Market | VTI | 2.68% | 9.02% | 12.61% | 23.81% | ||
| Default Gone-Fishing U.S. Stock | -2.03% | 5.87% | 6.54% | 14.65% | |||
| Vanguard Gone-Fishing U.S. Stock | -2.25% | 5.98% | 6.24% | 14.23% | |||
| Vanguard Value | 7.80% | 0.00% | VTV | -2.46% | 6.71% | 5.77% | 15.94% |
| SPDR® MSCI USA StrategicFactors | 0.00% | 7.80% | QUS | -0.86% | 5.93% | 7.98% | 19.02% |
| Vanguard Mid-Cap Value | 8.90% | VOE | -2.92% | 8.72% | 5.52% | 13.99% | |
| Vanguard Small-Cap Value | 9.70% | VBR | -0.75% | 9.65% | 4.89% | 12.39% | |
| Vanguard Information Technology | 10.60% | VGT | 6.15% | 8.15% | 19.08% | 29.31% | |
| Vanguard Health Care | 9.50% | VHT | -9.78% | -3.88% | -5.15% | 2.67% | |
| Vanguard Consumer Staples | 6.30% | VDC | -2.71% | 5.33% | 5.55% | 13.32% | |
| Vanguard Real Estate | 4.00% | VNQ | -7.68% | 8.28% | 6.17% | 4.81% | |
Note: We have included Vanguard Real Estate in our U.S. Stock reporting here for our Gone-Fishing portfolios. In our full Asset Allocation Design though, we typically section real estate ETFs into a separate asset class of Resource Stocks and report on it separately. That being said, this U.S. Stock portfolio is fairly compared to Vanguard Total Stock Market (VTI) because VTI includes U.S. REITs.
Without rebalancing, the U.S. Stock portion of the Marotta 2024 Gone-Fishing Portfolio had a 1-year return of 14.65% and the U.S. Stock portion of the Marotta Vanguard 2024 Gone-Fishing Portfolio had a 1-year return of 14.23%.
This can be compared to Vanguard Total Stock Market ETF (VTI), every stock in the U.S. exactly at its cap weight, which saw a 1-year return of 23.81%.
In our 2022 update, we discussed how those who concentrated their 2021 allocations in large-cap growth saw the best returns, but that for 2022 we thought investors may be glad to diversify elsewhere. In 2022, that turned out to be true, but that has not held true for 2023 and now 2024.
In 2024, large-cap growth fund Vanguard S&P 500 (VOO) saw a one-year return of 24.98% compared to the value-tilt funds of Vanguard Value (VTV) which posted a 15.94% return and SPDR® MSCI USA StrategicFactors (QUS) which posted a 19.02% return.
Again, most of the large-cap growth return was driven by Vanguard Information Technology, which posted a return of 29.31% for the one year.
In our default 2022 and 2023 Marotta’s Gone-Fishing Portfolio and in our managed portfolios, we showed preference to QUS over VTV so as to make only half a mistake. In 2022, VTV would have been the better choice. In 2023 and 2024, QUS was the better choice. This flip flopping makes us thankful we made only half a mistake.
Foreign Returns
| Allocation Vanguard | Default | Ticker | 3-Month | 6-Month | 9-Month | 1-Year | ||
|---|---|---|---|---|---|---|---|
| iShares MSCI ACWI ex US | ACWX | -7.53% | -0.42% | 0.56% | 5.19% | ||
| Full Freedom Investing Strategy | -8.73% | -3.49% | -0.92% | 1.24% | |||
| Default Gone-Fishing Foreign Stock | -8.33% | -0.09% | 4.47% | 6.10% | |||
| Vanguard Gone-Fishing Foreign Stock | -7.17% | 0.42% | 2.19% | 6.10% | |||
| Franklin FTSE Switzerland | 0.00% | 6.50% | FLSW | -11.33% | -3.88% | -0.83% | -1.75% |
| iShares MSCI Singapore | 0.00% | 6.50% | EWS | 1.22% | 16.77% | 24.36% | 22.10% |
| iShares MSCI Denmark | 0.00% | 6.50% | EDEN | -15.99% | -15.15% | -11.80% | -3.91% |
| iShares MSCI Sweden | 0.00% | 6.50% | EWD | -14.01% | -7.25% | -5.08% | -3.90% |
| Vanguard FTSE Emerging Markets | 17.10% | 17.20% | VWO | -5.75% | 3.36% | 8.71% | 10.58% |
| Vanguard FTSE Developed Markets | 26.10% | 0.00% | VEA | -8.09% | -1.52% | -2.08% | 3.16% |
Without rebalancing, the Foreign Stock portion of the Marotta 2024 Gone-Fishing Portfolio and the Marotta Vanguard 2024 Gone-Fishing Portfolio both had a return of 6.10%. These two investment strategies differ in significant ways; it is only a coincidence they ended up at the same 1-year return.
These returns can be compared to iShares MSCI ACWI ex US ETF (ACWX), every stock in the foreign world exactly at its cap weight, which saw a 1-year return of 5.19%.
It can also be compared to our full Freedom Investing strategy (a different model portfolio which represents our static targets), which would have had a 1-year return of 1.24%. Our Freedom Investing Strategy underperformed the Default Gone-Fishing Portfolio due primarily to the inclusion of South Korea which posted a return of -18.83% for the year and to the inclusion of Emerging Markets ex-China which posted 0.48% compared to VWO which posted 10.58% thanks to the addition of China (FLCH +17.99%).
Reminder: Stay the Course
Israel (EIS +34.48%), U.S. Technology (VGT +29.31%), and Singapore (EWS +22.10%) were especially profound performers for 2024. However, the worst reason to buy more of something is because it has done well recently.
Instead, we strive to utilize a portfolio strategy that does not require market timing to be successful. We think the contrarian effect of rebalancing on a historically justifiable portfolio gives the best chance of weathering the market ups and downs.
For this reason, our advice is to stay the course. It is always a good time to have a balanced portfolio.
Photo by Steven Van Elk on Unsplash. Returns data gathered from Morningstar Advisor Workstation.
