Strategic Investment Mixology - Developing The "Holy Grail" Portfolio

Antoine Tedesco, in his "The History of Cocktails", lists three things that mixologists consider important to understand when making a cocktail: the base spirit, which gives the drink its main flavor; the mixer or modifier, which blends well with the main spirit without overpowering it; and the flavoring, which brings it all together.

Similarly, your personal investment strategy needs to help you:

  • Put together a portfolio that is based on your financial situation, goals, and plans, providing both a sense of direction and a framework for decision making;
  • Use a well defined and consistent investment methodology that fits well with the plan without leading it in tangential directions;
  • Exercise goal directed judgment in the day-to-day decision making that brings the whole thing together and makes it productive.

Tedesco goes on to explain that new cocktails are the result of experimentation and curiosity. They reflect the moods of modern day society, and change rapidly as both bartenders and their customers seek out and popularize new and different concoctions.

The popularity of most newbies is generally fleeting while the reign of the old stalwarts is history... with the exception, perhaps, of "Goat's Delight" and "Hoptoad". But, rest assured, Manhattans, Martinis, and all y'all's Mint Juleps are here to stay.

It's likely that many of the products, derivatives, funds, and fairy tales now popular on Wall Street were thrown together after "ti many martunies" at Bobby Van's or Cipriani's. And just like alcohol, addictive products created in lower Manhattan have led many an optimistic speculator down the Holland tubes.

The most popular of today's financial products are, themselves, Wall Street's creative response to the speculative mood of an impatient (and, perhaps, effort averse) society. The "wizards" experiment tirelessly; their customers' search for the Holy Grail portfolio cocktail is endless; the basic (perhaps boring) fundamental principles of investing are roundly ignored... they're just not that tasty anymore.

Investment portfolio mixology doesn't take place in the smiley faced environment that brought us the Cosmo and the Kamikaze, but putting an investment portfolio cocktail together without the risk of addictive speculations, or a bad aftertaste, is surely a talent worth developing.

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My articles always describe aspects of an investment process I have been using since the 1970's, as described in my book, "The Brainwashing ...

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