Unconventional Investing

Debut authors Higgins and Hajek propose a boldly different investment strategy.
Financial planner Higgins and CPA Hajek have combined to craft a book designed to upend the investing apple cart. Claiming that the conventional balanced portfolio of 60 percent stocks and 40 percent bonds is outdated and impractical, they urge readers to “step outside-the-box and consider some different ideas and insights.” They begin by questioning conventional investing, exploring investment psychology and exploding common myths. The authors then lay a foundation for unconventional thinking with a highly informative discussion of five key issues investors must first understand: debt, deficits, quantitative easing, inflation and rising rates. Particularly compelling are their discussions of “the 401(k) handcuff” and “the inherent flaws embedded within the increasingly popular target date retirement funds.” In the appealing second half of the book, Higgins and Hajek explain in considerable detail five specific unconventional strategies. One of the more dramatic aspects of this section is the statistical evidence they offer: The “classic” (60/40) portfolio shows a 15-year annualized return of 5.65 percent, while their new “7Twelve Balanced Portfolio” (“twelve selected funds within seven core asset classes”) reaps a 15-year annualized return of 8.44 percent. This is only part of the story; the authors go far beyond investing in stocks alone, discussing a broad range of investments from gold to real estate investment trusts. While Higgins and Hajek claim they wrote this book for the ordinary investor rather than a financial professional, the average reader might be somewhat overwhelmed by the detailed analysis shown in examples, charts and graphs. Still, the well-written material supports the authors’ contention that less traditional investment vehicles may be better bets. In the end, Higgins and Hajek advocate being open to other investment options and taking personal control of one’s investment strategy—sound advice for any investor who wants to maximize returns.
Wise, authoritative and carefully documented; should stimulate deep thought in those who are willing to break free of the conventional investing mode.