Lazy Portfolios in 2020

The following table lists 2020 total returns for various examples of “lazy portfolios”. Some of the portfolios (Coffeehouse and Coward’s) are designed as 60/40 stock/bond portfolios. Other portfolios (Armstrong Ideal and Swensen) are designed as 70/30 stock/bond portfolios. The two-fund, three-fund, and four-fund portfolios are scaled to similar stock/bond allocations. Prior to 2018, returns are derived from … Read more

Frank Armstrong Ideal Index Portfolio- 2020 update

Frank Armstrong III, investment advisor and author, offers the following seven fund “Ideal Indexed” portfolio in his book, The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio (published December 16, 2003). The portfolio employs a 70% equity / 30% fixed income split, consisting of six equity asset class funds and one fixed … Read more

Lazy Portfolios in 2019

The following table lists 2019 total returns for various examples of “lazy portfolios”. Some of the portfolios (Coffeehouse and Coward’s) are designed as 60/40 stock/bond portfolios. Other portfolios (Armstrong Ideal and Swensen) are designed as 70/30 stock/bond portfolios. The two-fund, three-fund, and four-fund portfolios are scaled to similar stock/bond allocations. Prior to 2018, returns are derived from … Read more

Frank Armstrong Ideal Index Portfolio- 2019 update

Frank Armstrong III, investment advisor and author, offers the following seven fund “Ideal Indexed” portfolio in his book, The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio (published December 16, 2003). The portfolio employs a 70% equity / 30% fixed income split, consisting of six equity asset class funds and one fixed … Read more

Lazy Portfolios in 2018

assetallocationpiechartThe following table lists 2018 total returns for various examples of “lazy portfolios”.

Some of the portfolios (Coffeehouse and Coward’s) are designed as 60/40 stock/bond portfolios. Other portfolios (Armstrong Ideal and Swensen) are designed as 70/30 stock/bond portfolios. The two-fund, three-fund, and four-fund portfolios are scaled to similar stock/bond allocations. The returns are derived from investments in investor share class Vanguard index funds.

 2018 total return

Portfolio 60/40 70/30
Two-fund -5.85% -6.82%
Three-fund -4.78% -5.57%
Ferri Core four -4.98% -5.63%
Vanguard Core four -4.98% -5.95%
Coffeehouse -5.19%
Coward’s -5.01%
Armstrong Ideal -6.81%
Swensen -5.67%

Read more

Frank Armstrong’s Ideal Index portfolio – 2018 update

frank-armstrong-262x300
Frank Armstrong III, investment advisor and author, offers the following seven fund “Ideal Indexed” portfolio in his book, The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio (published December 16, 2003).
The portfolio employs a 70% equity / 30% fixed income split, consisting of six equity asset class funds and one fixed income fund.
In 2018 the Ideal portfolio produced the following return:

Year Return
2018 -6.81%

The equity slice holds a 31% portfolio allocation to international stocks. The US stock allocation has a value tilt, as the value allocations are larger than the blend and growth allocations. The asset class allocations include:

  • US large blend stocks : 6.25%
  • US large value stocks : 9.25%
  • US small growth stocks: 6.25%
  • US small value stocks : 9.25%
  • US REITS : 8.00%
  • International stocks: 31.00%
  • US short-term bonds: 30.00%

The chart below (click to enlarge) shows the portfolio allocation (rounded values in the pie chart).

image23
Ideal Indexed portfolio

Fund selection

The portfolio can be implemented using the following Vanguard funds. With Vanguard having lowered the minimum investment for admiral share class funds in 2018, we now use these lower cost funds for portfolio allocations. The portfolio can be implemented with any suitable index fund or exchange-traded fund, but the Vanguard portfolios have longer performance histories.

Fund Ticker Expense ratio
500 Index VFIAX 0.04%
Value Index VVIAX 0.05%
Small Growth Index VSGAX 0.07%
Small Value Index VSIAX 0.07%
REIT Index VGSLX 0.12%
Total International Index VTIAX 0.11%
Short-term Bond Index VBIRX 0.07%

Read more

Lazy Portfolios in 2017

assetallocationpiechartThe following table lists 2017 total returns for various examples of “lazy portfolios”.

Some of the portfolios (Coffeehouse and Coward’s) are designed as  60/40 stock/bond portfolios. Other portfolios (Armstrong Ideal and Swensen) are designed as 70/30 stock/bond portfolios.  The two-fund, three-fund, and four-fund portfolios are scaled to similar stock/bond allocations. The returns are derived from investments in investor share class Vanguard index funds.

 2017 total return

Portfolio 60/40 70/30
Two-fund 15.82% 17.88%
Three-fund 15.15% 17.10%
Ferri Core four 14.18% 15.97%
Vanguard Core four 15.41% 17.46%
Coffeehouse 14.42%
Coward’s 11.76%
Armstrong Ideal 14.58%
Swensen 13.44%

Read more

Frank Armstrong’s Ideal Index portfolio – 2017 update

frank-armstrong-262x300
Frank Armstrong III, investment advisor and author, offers the following seven fund “Ideal Indexed” portfolio in his book, The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio (published December 16, 2003).

The portfolio employs a 70% equity / 30% fixed income split, consisting of six equity asset class funds and one fixed income fund.
In 2017 the Ideal portfolio produced the following returns:

Year Return
2017 14.58%

The equity slice holds a 31% portfolio allocation to international stocks. The US stock allocation has a value tilt, as the value allocations are larger than the blend and growth allocations. The asset class allocations include:

  • US large blend stocks : 6.25%
  • US large value stocks : 9.25%
  • US small growth stocks: 6.25%
  • US small value stocks : 9.25%
  • US REITS : 8.00%
  • International stocks: 31.00%
  • US short-term bonds: 30.00%

The chart below (click to enlarge) shows the portfolio allocation (rounded values in the pie chart).

image23
Ideal Indexed portfolio

Fund selection

The portfolio can be implemented using the following Vanguard funds.  The portfolio can be implemented with any suitable index fund or exchange-traded fund, but the Vanguard portfolios have longer performance histories.

Fund Ticker Expense ratio
500 Index VFINX 0.14%
Value Index VIVAX 0.18%
Small Growth Index VISGX 0.19%
Small Value Index VISVX 0.19%
REIT Index VGSIX 0.26%
Total International Index VGTSX 0.18%
Short-term Bond Index VBISX 0.15%

Read more

Lazy Portfolios in 2016

assetallocationpiechartThe following table lists 2016 total returns for various examples of “lazy portfolios”.

Some of the portfolios (Coffeehouse and Coward’s) are designed as  60/40 stock/bond portfolios. Other portfolios (Armstrong Ideal and Swensen) are designed as 70/30 stock/bond portfolios.  The two-fund, three-fund, and four-fund portfolios are scaled to similar stock/bond allocations. The returns are derived from investments in investor share class Vanguard index funds.¹ Lower cost admiral share class funds would add approximately +0.10% to returns. Detailed descriptions of each portfolio’s annual returns are linked.

 2016 total return

Portfolio 60/40 70/30
Two-fund 6.20% 6.80%
Three-fund 7.10% 7.87%
Ferri Core four 6.85% 7.57%
Vanguard Core four 6.89% 7.51%
Coffeehouse 9.44%
Coward’s 9.02%
Armstrong Ideal 7.76%
Swensen 7.38%

Read more

Frank Armstrong’s Ideal Index portfolio 2016 update

frank-armstrong-262x300
Frank Armstrong III, investment advisor and author, offers the following seven fund “Ideal Indexed” portfolio in his book, The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio (published December 16, 2003).
The portfolio employs a 70% equity /30% fixed income split, consisting of six equity asset class funds and one fixed income fund.
In 2016 the Ideal portfolio produced the following returns:

Year Return
2016 7.76%

The equity slice holds a 31% portfolio allocation to international stocks. The US stock allocation has a value tilt, as the value allocations are larger than the blend and growth allocations. The asset class allocations include:

  • US large blend stocks : 6.25%
  • US large value stocks : 9.25%
  • US small growth stocks: 6.25%
  • US small value stocks : 9.25%
  • US REITS : 8.00%
  • International stocks: 31.00%
  • US short-term bonds: 30.00%

The chart below (click to enlarge) shows the portfolio allocation (rounded values in the pie chart).

image23
Ideal Indexed portfolio

Fund selection

The portfolio can be implemented using the following Vanguard funds.  The portfolio can be implemented with any suitable index fund or exchange-traded fund, but the Vanguard portfolios have longer performance histories.

Fund Ticker Expense ratio
500 Index VFINX 0.15%
Value Index VIVAX 0.21%
Small Growth Index VISGX 0.20%
Small Value Index VISVX 0.20%
REIT Index VGSIX 0.25%
Total International Index VGTSX 0.19%
Short-term Bond Index VBISX 0.16%

Read more