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!
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”.
|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%|