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More Lazy Portfolios

Page history last edited by Ken Schwartz 16 years, 1 month ago

 

Beyond the simple 3- and 4-Fund Lazy Portfolios are more complex portfolios.  These are still "lazy" in that they contain enough bonds (typically 30-40%) to allow the investor to maintain the same AA for much of the accumulation phase of their lives.  The more complex funds add REITs, and "slice and dice" the US and/or International stocks, adding large and small value to the mix.

 

 

Bill Shultheis' "Coffeehouse" Portfolio

 

This simple 7-fund portfolio was made popular by Bill Shultheis' book The Coffeehouse Investor. He advocates 40% in an intermediate term bond fund and 10% each in various stock funds.  More information can be found at The Coffeehouse Investor website.

 

The Coffeehouse Portfolio contains only 10% international stocks (17% of total equities).  It slices up the domestic portion, but uses a total international fund.

 

 

 

 

 

William Bernstein "Coward's" Portfolio

 

William Bernstein is the author of several books including The Intelligent Asset Allocator and The Four Pillars of Investing.  He introduced the Coward's Portfolio in 1996. The "coward" refers not to the investor's risk tolerance but to the strategy of hedging one's bets and having slices of a number of asset classes.  This portfolio is similar to the Coffeehouse Portfolio except that short term bonds are used, and the international portion is divided into equal slices of Europe, Pacific and EM.

 

 

 

 

 

 

 

Frank Armstrong "Ideal Index" Portfolio

 

Frank Armstrong, author of The Informed Investor, proposed this portfolio for an MSN Money article. It contains a smaller allocation to bonds, and a much larger allocation to international stocks (in fact the equities, excluding REIT, are split 50/50 between domestic and international).  Like Bernstein he advocates short term bonds.

 

If the domestic slices were replaced by a total market fund, this portfolio would be very close to the 3-Fund portfolios, with a slice of REIT added.

 

 

 

 

 

 

 

David Swensen Lazy Portfolio

 

David Swensen is CIO of Yale University and author of Unconventional Success. His lazy portfolio uses low-cost, tax-efficient total market funds, a healthy dose of REIT, and inflation-protected securities (TIPS).

 

 

 

 

 

 

 

 

 

 

 

 

Further Reading

Lazy portfolios win again   Paul Farrell column, marketwatch.com - follows a number of lazy portfolios and compares returns vs. S&P500

The Kirk Report Comprehensive blog post of dozens of lazy portfolios

 

See Also:

3 Fund Lazy Portfolios

Core Four Portfolio

 

 

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