Portfolio Options

In Money for Something we talk about the importance of investing in an “asset allocation” in order to reduce risk and benefit from diversification. The book presents one particular asset allocation, in which I personally invest, called “The Permanent Portfolio”.

You’ll find other popular allocations below—and for each, thanks to the great work by the folks at Portfolio Charts, we provide the constituent ETFs and weightings, as well as the portfolio’s historical long-term risk (volatility) and inflation-adjusted (real) return.

Don’t get hung up in decision paralysis—remember, it’s far far more important to stick to an allocation, than to have chosen the perfect one to begin with!

Harry Browne Permanent Portfolio
25.0% Vanguard Total Stock Market VTI
25.0% iShares Long-term US Government Bonds TLT
25.0% iShares Gold Trust IAU
25.0% iShares Short Treasury Bond SHV
Real Return: 5.0% — Risk: 7.1%
Golden Butterfly Portfolio
20.0% Vanguard Large Cap Stocks VV
20.0% Vanguard Small Cap Value Stocks VBR
20.0% iShares Long-term US Government Bonds TLT
20.0% iShares Gold Trust IAU
20.0% iShares Short Treasury Bond SHV
Real Return: 6.1% — Risk: 7.6%

For a non-US citizen interested in investing in the Golden Butterfly, but through low-cost ETFs not issued by US companies (e.g. to avoid potential US estate tax issues), the following is an implementation using ETFs issued by the Ireland subsidiary of iShares, all of which can be purchased on most European exchanges.

Non-US Listed Golden Butterfly Portfolio
20.0% iShares Core S&P 500 UCITS ETF CSPX
20.0% iShares S&P SmallCap 600 UCITS ETF IDP6
20.0% iShares Treasury Bond 20+yr UCITS ETF IDTL
20.0% iShares Physical Gold ETC IGLN
20.0% iShares Treasury Bond 1-3yr UCITS ETF IDBT

NOTE: The ticker symbols listed above correspond to the USD offerings of these products on the London Stock Exchange. If you’re purchasing them on another exchange (e.g. Switzerland), you can find their equivalent ticker symbols at the bottom of each above-listed webpage, in the section called “Listings”.

Rick Ferri Core Four Portfolio
48.0% Vanguard Total Stock Market VTI
24.0% Vanguard Total International Stock Market VXUS
8.0% Vanguard Real Estate Investment Trust VNQ
20.0% Vanguard Total Bond Market BND
Real Return: 6.8% — Risk: 13.9%
William Bernstein Portfolio
25.0% Vanguard Large Cap Stocks VOO
25.0% Vanguard Small Company Stocks VB
25.0% Vanguard International Developed Stocks VEA
25.0% iShares Short Treasury Bond SHV
Real Return: 6.5% — Risk: 13.4%
Bill Schultheis Coffeehouse Portfolio
40.0% Vanguard Total Bond Market BND
10.0% Vanguard S&P 500 Stocks VOO
10.0% Vanguard Value Stocks VTV
10.0% Vanguard Total International Stock Market VXUS
10.0% Vanguard Real Estate Investment Trust VNQ
10.0% Vanguard Small Company Value Stocks VBR
10.0% Vanguard Small Company Stocks VB
Real Return: 6.5% — Risk: 11.0%
David Swensen Yale Endowment Portfolio
30.0% Vanguard Total Stock Market VTI
20.0% Vanguard Total International Stock Market VXUS
20.0% Vanguard Real Estate Investment Trust VNQ
15.0% iShares TIPS Government Bonds TIP
15.0% iShares Long-term US Government Bonds TLT
Real Return: 6.7% — Risk: 12.0%
Larry Swedroe Simple Portfolio
15.0% Vanguard Small Company Value Stocks VBR
15.0% Vanguard Emerging Markets Stocks VWO
35.0% iShares Short Treasury Bond SHV
35.0% iShares TIPS Government Bonds TIP
Real Return: 5.6% — Risk: 8.1%

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