Investment Advice From A Banker’s Deathbed

December 1st, 2010

Some people would shatter under the weight of Gordon Murray’s diagnosis. But he channeled his remaining energy into creating a legacy.

In 2008, former Wall Street bond salesman Gordon Murray was diagnosed with brain cancer. Five months ago he decided to end his treatment and write “The Investment Answer.”
After 25-years of high-level jobs on Wall Street, Mr. Murray says he suddenly realized that everything he knew about investing was wrong. Actively managing (tinkering with) investment portfolios, he says, is useless at best, and harmful at worst.
Even as an experienced financial player, Murray found he didn’t actually know much about asset allocation. He learned the ropes in firms like Goldman Sachs and Lehman Brothers, which valued risk and bravado over safety and simplicity. His book, full of simple investment advice, is aimed at investors who are in the same position he was.

The five choices Murray says every investor needs to make:

Only work with financial advisors who earn commission from you – not mutual funds or insurance companies
Diversify! Keep your money allocated between stocks and bonds, big and small, and value and growth
Make sure to include foreign investments to guard against economic disasters in the U.S.
Be skeptical of actively-managed funds… even experienced fund managers can’t predict the future of the market
Rebalance – sell your winners, buy more losers. It’s painful, but improves your returns in the long run

“It’s American to think that if you’re smart or work hard, then you can beat the markets.” – Gordon Murray