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 MarketVTI
25.0%iShares Long-term US Government BondsTLT
25.0%iShares Gold TrustIAU
25.0%iShares Short Treasury BondSHV
Real Return: 5.0% — Risk: 7.1%
Golden Butterfly Portfolio
20.0%Vanguard Large Cap StocksVV
20.0%Vanguard Small Cap Value StocksVBR
20.0%iShares Long-term US Government BondsTLT
20.0%iShares Gold TrustIAU
20.0%iShares Short Treasury BondSHV
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 ETFCSPX
20.0%iShares S&P SmallCap 600 UCITS ETFIDP6
20.0%iShares Treasury Bond 20+yr UCITS ETFIDTL
20.0%iShares Physical Gold ETCIGLN
20.0%iShares Treasury Bond 1-3yr UCITS ETFIDBT

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 MarketVTI
24.0%Vanguard Total International Stock MarketVXUS
8.0%Vanguard Real Estate Investment TrustVNQ
20.0%Vanguard Total Bond MarketBND
Real Return: 6.8% — Risk: 13.9%
William Bernstein Portfolio
25.0%Vanguard Large Cap StocksVOO
25.0%Vanguard Small Company StocksVB
25.0%Vanguard International Developed StocksVEA
25.0%iShares Short Treasury BondSHV
Real Return: 6.5% — Risk: 13.4%
Bill Schultheis Coffeehouse Portfolio
40.0%Vanguard Total Bond MarketBND
10.0%Vanguard S&P 500 StocksVOO
10.0%Vanguard Value StocksVTV
10.0%Vanguard Total International Stock MarketVXUS
10.0%Vanguard Real Estate Investment TrustVNQ
10.0%Vanguard Small Company Value StocksVBR
10.0%Vanguard Small Company StocksVB
Real Return: 6.5% — Risk: 11.0%
David Swensen Yale Endowment Portfolio
30.0%Vanguard Total Stock MarketVTI
20.0%Vanguard Total International Stock MarketVXUS
20.0%Vanguard Real Estate Investment TrustVNQ
15.0%iShares TIPS Government BondsTIP
15.0%iShares Long-term US Government BondsTLT
Real Return: 6.7% — Risk: 12.0%
Larry Swedroe Simple Portfolio
15.0%Vanguard Small Company Value StocksVBR
15.0%Vanguard Emerging Markets StocksVWO
35.0%iShares Short Treasury BondSHV
35.0%iShares TIPS Government BondsTIP
Real Return: 5.6% — Risk: 8.1%

Send this to friend