Lazy Portfolios

Margaritaville is the one I have recommend to nieces and nephews. Though now I recommend 2/3 Vanguard's total world market index and 1/3 the TIPS fund.

Margaritaville guides my own portfolio, but I never manage to keep it that simple. For fixed income, I use a TIPS ladder, MM and short-term bond funds instead of just the TIPS fund. On the equity side, I have a mix of index funds with more of a small tilt in the US, more of an emerging/pacific tilt internationally, and a number of legacy individual stocks with unrealized capital gains I don't want to realize yet.
 
I refuse to buy a bond mutual fund so I have the fun of picking CDs for my ladder. I want to know how much I'll have available and when. I don't want my principle to be subject to interest rate risk. I want to know that one June 15, 2011 I'll have $30,000 show up in my account.

As for the equity portion, it is almost all in just a couple index funds.
 
I have been trying to keep my equities 50/50 US/International, but I have added a TIPs fund, foreign bond fund and am now building a 5-year CD ladder in anticipation of retirement, so it is drifting towards the Margaritaville model. My instructions to my wife in case I peg out first include converting the entire portfolio to Margaritaville for simplicity.

I have not been a big fan of bond funds but have been persuaded to include them. It seems to have been a good thing to do. (Old Dutch saying: "We grow too soon old and too late smart.")
 
Sorry, that link did not work. But it seems everybody figured out what portfolios I was trying to get to. I guess they are not all that popular. I'm looking for a cookie cutter portfolio that will do me right for the duration without a lot of worrying.
 
They like to show how well these have held up in the down market, but have they done any back testing in a bull market?
 
cashflo2u2 said:
Sorry, that link did not work. But it seems everybody figured out what portfolios I was trying to get to. I guess they are not all that popular. I'm looking for a cookie cutter portfolio that will do me right for the duration without a lot of worrying.
Click to expand...

I think you will find the individuals who post regularly to the "FIRE and Money" forum are generally self-selected invest-it-yourself tinkerers. Most of us are constantly studying and talking about improving our investing, because we enjoy doing so. We almost all save a lot on portfolio management fees, and we almost all make investing much more complex than it needs to be.

Imagine a forum for people who rebuild old cars in their garages, to which you post the question: "Should I go to the dealer or to Jiffy Lube to have the oil changed in my brand new car?" Most of the responses would probably be: "Well, I would just change it myself, but I send my MIL/daughter/cousin to ____."

If you want set it and forget it, your basic choices are hire someone, though that can easily cost you 25% of your safe withdrawal annually, or use some variant of the lazy automated portfolios. Personally, if I had just been told I had a brain disorder, and would soon be unable to manage my portfolio, I would put:

  • 64% in Vanguard Total World Stock Index (VTWSX)
  • 32% in Vanguard Inflation Protected Securities (VIPSX)
  • 4% in a Vanguard money market fund
I would tell my wife that whenever the money market fund ran low, she should transfer money from either VTWSX or VIPSX trying to always move the portfolio towards 2 parts VTWSX to 1 part VIPSX. I would also tell her that once a year she should calculate 4% of the portfolio, and compare it with last years 4%. Each year she should not spend more than the greater of the two numbers, and never more than 8% of the current portfolio until she was in a nursing home. Lastly, I would tell her to otherwise just ignore the portfolio regardless of what was in the news, and where anyone told her to invest.

Obviously feel free to use Admiral funds if your portfolio size permits. A 1 part VTWSX to 1 part VIPSX variant is also very reasonable if you want to be more conservative. You can also pick some other lazy portfolio if you prefer.

If pressed, I might even admit that the simple portfolio I describe has a good chance of beating my actual portfolio's performance, and would definitely be less volatile than my actual portfolio. However, I expect to continue tinkering.>:D
 
VTWSX seems kind of new to put all the equity funds into. I almost did with the new VG payout funds and I'm glad I didn't.
 
cashflo2u2 said:
VTWSX seems kind of new to put all the equity funds into. I almost did with the new VG payout funds and I'm glad I didn't.
Click to expand...

Feel free to use:

  • 1/3 VTSMX
  • 1/3 VGTSX
  • 1/3 VIPSX
if that makes you more comfortable. Because VTWSX is a Vanguard index fund, I don't worry about its youth the way I would with a managed fund or a smaller fund company.
 
bamsphd said:
Personally, if I had just been told I had a brain disorder ...
Click to expand...

One of my last sane acts was to realize I had just such a disorder, when I found Enron in my portfolio circa late 2001. ;)

Since then, I've reformed my ways and become a set-it-and-forget-it kind of guy.

Sing it with me ...

"Lazy.

I just want to be lazy.

How I long to be out, in the sun, with no work to be done ... "
 
Lusitan said:
One of my last sane acts was to realize I had just such a disorder, when I found Enron in my portfolio circa late 2001. ;)

Since then, I've reformed my ways and become a set-it-and-forget-it kind of guy.
Click to expand...
Enron was my last individual stock buy. When they went into the first part of their death dive, I looked at their assets and figured that their pipelines and other hard assets would keep their breakup value above $15. I bought a bunch at $8. I never sold. I guess you could say I'm waiting for the rebound. :rolleyes:

After that, I went from being about half indexer to 100% index. I still have a small amount of BAC that I haven't sold because of a large capital gain. It's still positive but I might move my after tax index funds around a little to capture the tax loss and cover the gain on my BAC.
 
I wonder if DVFAX, that is relatively new also, would be an excellent addition to portfolio at this point.
 
When I look at the Lazy Portfolios, some of them have so many funds in them, that they seem to be creating their own Total World Index Fund.
 
Though my percentages are different. I'm closest to the Second Grader Starter portfolio. :)
 
Last edited:
I suspect many here have portfolios that resemble the lazy portfolios, with an eye on minimizing expenses and taxes. Mine is a subtle variation on William Bernstein's The Four Pillars or Investing, close to two shown by the link but not exactly the same as any. They all have their place, you may put your own spin on them (as I am sure we all do) but the lazy portfolios are fundamentally similar.
 
As I've said here before, I am basically 100% VFIAX/VTSMX and have been so in my investments for years. I do have some cash in an emergency fund and the kids' college funds are a mixture of VxxxX and those target funds. I also have some private stock in a former employer, but will convert that to VxxxX as soon as they do their IPO (or delete it from Quicken and take the capital loss if they go bankrupt.)

No individual stocks, no options, no commodities, no actively managed mutual funds, no trading.

2Cor521
 
I have 62% VTSAX, 1% VGTSX, 23% VAIPX, 2.5% in GOOG, RAX and BIDU, and 11.5% in savings. The VAIPX is all in the tax-deferred part of my investments.

The individual stocks are just for a bit of fun, and heaven knows why I put such a small amount into VGTSX.

Some folk know just enough about investing to be dangerous with their own money. Luckily (I think), I don't even know that much, so will probably stick fairly close to these figures in the future.

The nice thing about not being overly smart and living with my head in the clouds much of the time is that when everyone thinks the world is ending and the sky is falling, I'm too preoccupied with my life to be worried about changing the direction of my investments.
 
bamsphd said:
I think you will find the individuals who post regularly to the "FIRE and Money" forum are generally self-selected invest-it-yourself tinkerers. Most of us are constantly studying and talking about improving our investing, because we enjoy doing so. We almost all save a lot on portfolio management fees, and we almost all make investing much more complex than it needs to be.

Imagine a forum for people who rebuild old cars in their garages, to which you post the question: "Should I go to the dealer or to Jiffy Lube to have the oil changed in my brand new car?" Most of the responses would probably be: "Well, I would just change it myself, but I send my MIL/daughter/cousin to ____."

...

If pressed, I might even admit that the simple portfolio I describe has a good chance of beating my actual portfolio's performance, and would definitely be less volatile than my actual portfolio. However, I expect to continue tinkering.>:D
Click to expand...

If we were face-to-face right now, I would pour you a shot of Cognac (which I actually have), and light you a cigar (which I do not have)...

Major Tom said:
The nice thing about not being overly smart and living with my head in the clouds much of the time is that when everyone thinks the world is ending and the sky is falling, I'm too preoccupied with my life to be worried about changing the direction of my investments.
Click to expand...

And I would do the same for you too...

Hey, a guy's got to do what makes him happy, as long as it is not immoral, nor illegal, nor unethical.
 
I used to mix my own Vanguard index funds, then for a while I ran with a LifeStrategy Moderate Growth sprinkled with some extra diversification like the REIT fund and an international index. Then a couple of years ago or so I went for a Wellington-Wellesley split to target my desired AA. I do still have Fidelity's Spartan 500 fund because it's the only low-expense fund available in my current 401(k), but the Wellington-Wellesley mix is very self-balancing and lazy at a slight fee expense premium over my previous options.

I didn't like the Asset Allocation fund component of LifeStrategy Moderate growth else I probably would have stuck with it. I view the Wellington-Wellesley mix as quite similar to my previous mixes with the exceptions that it's more value stock focused and a bit higher expense.
 
I'm LAZY!

Most of my retirement costs will be covered by rent, SS and an annuity, and the rest of my portfolio is 10% cash and the rest divided evenly between, Vanguard Wellesley, Total Bond Index, Total Stock Market Index and Total International (or the equivalents in accounts from other providers)
 
nun said:
I'm LAZY!

Most of my retirement costs will be covered by rent, SS and an annuity, and the rest of my portfolio is 10% cash and the rest divided evenly between, Vanguard Wellesley, Total Bond Index, Total Stock Market Index and Total International (or the equivalents in accounts from other providers)
Click to expand...
Here's to lazy (lifts his glass). It prevents us from doing possibly foolish things with our livelihoods :D
 
You must log in or register to reply here.

Similar threads

Tranquility Base
Borrowing Against Investment Portfolio For Home Purchase
Replies
15
Views
470
pb4uski
pb4uski
2
Reducing stock exposure in Retirement, age 60+
4 5 6
Replies
144
Views
8K
Onda
O
F
Invest Social Security??
Replies
3
Views
763
Flyfish1
F
Car-Guy
Slow Fixed Income Payments (Rant?)
Replies
8
Views
520
Midpack
Midpack
P
Lump Sum & Invest Vs SWR
Replies
21
Views
1K
perez99
P

Latest posts

Back
Top Bottom