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Lazy Portfolios Roundup: Part 1

Lazy Portfolios Roundup: Part 1

06.24.2008 by maxmoney

 

I have profiled some lazy portfolios below. I am hoping that this will help me become a better lazy investor. In addition, it will also help the readers of this blog with their investment decisions.

The performance numbers for these portfolios will be updated every weekend. If there are portfolios that are not covered here but you'd like to be in this list, do let me know.

Something about my investments portfolios, I usually have multiple accounts. A few of those are pure lazy ones, while the others are little active. I will be talking about the active techniques in some other posts. This article has the lazy portfolios that I have been influenced with. My own investments are in a combination of a few of these below.

My references have been, for the most part, the articles of Paul Farrell, a Marketwatch columnist, and the web-pages of the inventors of the individual portfolios. I will provide references below if you'd like to follow up and get some more information.

Paul Farrell is a huge proponent of lazy portfolios and every now and then he writes about them. He is also the author of the book "The Lazy Person's Guide to Investing". I highly recommend it to anyone who has any interest in this subject matter.

 

 

Second Grader's Starter Portfolio

Originally by Kevin Roth when he was in second grade. I came to know of this by Paul's article  and here.

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 60%
Vanguard Total International Stock Index VGTSX 30%
Vanguard Total Bond Market Index VBMFX 10%

Total Equity allocation: 90%

 

Scott Burns Lazy Portfolio Suite

Columnist Scott Burns (Assetbuilder.com) has a bunch of lazy portfolios.

Couch Potato Portfolio:

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 50%
Vanguard Inflation Protected Securities VIPSX 50%

Total Equity allocation: 50%

 

Margaritaville Portfolio:

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 33.3%
Vanguard Total International Stock Index VGTSX 33.3%
Vanguard Inflation Protected Securities VIPSX 33.3%

Total Equity Allocation: 66.6%

 

Four Square Portfolio

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 25%
Vanguard Total International Stock Index VGTSX 25%
Vanguard Inflation Protected Securities VIPSX 25%
American Century International Bond Fund BEGBX 25%

Total Equity Allocation: 50%

 

Five Fold Portfolio

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 20%
Vanguard Total International Stock Index VGTSX 20%
Vanguard REIT Index VGSIX 20%
Vanguard Inflation Protected Securities VIPSX 20%
American Century International Bond Fund BEGBX 20%

Total Equity Allocation: 60%

 

Six Ways From Sunday Portfolio

Fund Ticker Allocation %
Vanguard Total Stock Market Index VTSMX 16.66%
Vanguard Total International Stock Index VGTSX 16.66%
Vanguard Energy VGENX 16.66%
Vanguard REIT Index VGSIX 16.66%
Vanguard Inflation Protected Securities VIPSX 16.66%
American Century International Bond Fund BEGBX 16.66%

Total Equity Allocation: 66.67%

 

Dr. William Bernstein's Portfolios

William Bernstein is a neurologist by training and is now also a financial advisor. He is the author of bestseller books, "The intelligent Asset Allocator" and "The Four Pillars of Investing".

No Brainer Portfolio (Link)

Fund Ticker Allocation %
Vanguard 500 Index VFINX 25%
Vanguard European Stock Index VEURX 25%
Vanguard Small Cap Index NAESX 25%
Vanguard Total Bond Market Index VBMFX 25%

Total Equity Allocation: 75%

Smart Money Portfolio  (Link)

Fund Ticker Allocation %
Vanguard Emerging Markets Stock Index VEIEX 5%
Vanguard European Stock Index VEURX 5%
Vanguard Pacific Stock Index VPACX 5%
Vanguard REIT Index VGSIX 5%
Vanguard Short Term Investment Grade Index VFSTX 40%
Vanguard Small Cap Index NAESX 5%
Vanguard Small Cap Value Index VISVX 10%
Vanguard Total Stock Market Index VTSMX 15%
Vanguard Value Index VIVAX 10%

Total Equity Allocation: 60%

 

David Swensen's Unconventional Portfolio

Mr Swensen manages the Yale University's Endowment Fund and is the author of "Unconventional Success"(Link).

Fund Ticker Allocation %
Vanguard Inflation Protected Securities VIPSX 15%
Vanguard REIT Index VGSIX 20%
Vanguard Long Term Treasury Index VUSTX 15%
Vanguard Emerging Markets Stock Index VEIEX 5%
Vanguard Developed Markets Index VDMIX 15%
Vanguard Total Stock Market Index VTSMX 30%

Total Equity Allocation: 70%

 

Bill Schultheis's Coffeehouse Portfolio

Bill Schultheis is a former Smith Barney broker. The portfolio was launched in his 1999 book "The Coffeehouse Investor". It seems this is the No. 1 book that Jack Bogle recommends to people who are just starting out (Link).

Fund Ticker Allocation %
Vanguard 500 Index VFINX 10%
Vanguard REIT Index VGSIX 10%
Vanguard Small Cap Index NAESX 10%
Vanguard Small Cap Value Index VISVX 10%
Vanguard Total Bond Market Index VBMFX 40%
Vanguard Total International Stock Index VGTSX 10%
Vanguard Value Index VIVAX 10%

Total Equity Allocation: 60%

 

Ted Aronson's Family Portfolio

Ted is principal at AJO partners, an institutional fund manager. All his family's taxable money is in Vanguard Index funds (Link).

Fund Ticker Allocation %
Vanguard 500 Index VFINX 15%
Vanguard Emerging Markets Stock Index VEIEX 20%
Vanguard European Stock Index VEURX 5%
Vanguard Extended Market Index VEXMX 10%
Vanguard High Yield Corporate Bond VWEHX 5%
Vanguard Inflation Protected Securities VIPSX 10%
Vanguard Long Term Treasury Index VUSTX 5%
Vanguard Pacific Stock Index VPACX 15%
Vanguard Small Cap Growth Index VISGX 5%
Vanguard Small Cap Value Index VISVX 5%
Vanguard Total Stock Market Index VTSMX 5%

Total Equity Allocation: 80%

 

  

I need to update my lazy portfolio suite with a few of these portfolios,  which I will do tomorrow evening. Hopefully I will have the numbers in a neat table uploaded tomorrow night. In the meantime, do let me know what else you'd like to see. Till then...

 

Ref : http://www.maxmoneyblog.com/blog/2008/06/24/lazy-portfolios-roundup-part-1/

 


 

 

Lazy Portfolios Performance Numbers 

 

Here are the performance numbers of the lazy portfolios profiled in my earlier post.

I was asked to add the Merriman portfolio to the mix, so I have provided numbers for that too. I will later update my earlier post to provide details on the Merrriman portfolio.

Portfolio Name Corr to sp500 StdDev 1mo% 3mo% 6mo% 12mo% 2Yr% 5Yr% 6mo MDD% Stocks %
Six Ways From Sunday 0.91 4.96 -4.67 4.61 3.49 6.18 29.67 113.02 -9.62 67.00%
Four Square 0.89 3.47 -5.26 -1.77 -3.16 0.05 18.84 61.11 -6.46 50.00%
Couch Potato 0.96 2.97 -3.20 -0.68 -2.94 -0.41 13.90 41.28 -5.69 50.00%
Ted Aronson 0.92 5.69 -6.50 0.41 -5.60 -2.39 26.32 105.41 -12.95 80.00%
Five Fold 0.94 4.41 -5.69 -2.92 -2.51 -3.06 14.38 68.62 -7.39 60.00%
Margritaville 0.93 4.41 -5.93 -0.80 -5.13 -3.31 18.86 69.70 -9.25 67.00%
Merriman 0.94 4.54 -6.07 -1.70 -4.62 -4.04 18.04 74.71 -8.60 60.00%
David Swenson 0.95 4.99 -5.90 -2.45 -4.17 -4.61 15.19 72.98 -9.01 70.00%
Bernstein Smart Money 0.97 4.52 -5.17 -1.31 -4.91 -6.31 12.91 61.08 -9.51 60.00%
Second Graders 0.97 5.54 -6.22 -0.82 -7.14 -7.59 16.31 71.67 -13.09 90.00%
Bernstein No Brainer 0.96 5.03 -5.60 -0.66 -6.18 -7.93 14.06 64.67 -11.67 75.00%
Bill Schultheis Coffeehouse 0.96 4.50 -5.02 -2.08 -4.40 -7.27 9.74 55.27 -9.38 60.00%
S&P 500 Composite 1.00 5.95 -5.48 -2.59 -9.73 -12.28 5.25 32.37 -14.98 100.00%

Performance numbers are as of yesterday, 24th June, 2008.

Clearly, higher the Stock equity %, higher is the standard deviation.

All of the above portfolios beat SP500 beyond 6 months timeframe, with lower draw-down.

All but one portfolios, beat SP500 beyond 3 months.

 

 Ref : http://www.maxmoneyblog.com/blog/2008/06/24/lazy-portfolios-performance-numbers/

 

 

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