Lazy Portfolios

[W2R]

My portfolio is lazier than the lazy portfolios! Looked to me like most of them had a half dozen or more funds; some looked positively slicey-dicey to me. I pretty much just have 30% Wellesley and a very few index funds.

When working out my portfolio design, I went back and forth with the good folks over at Bogleheads a few times and they were a big help in refining my initially very rough idea of what I wanted to do.

If any are reading, thanks so much!

 

[web_diva]

Harry Browne's "Permanent Portfolio" has an extremely strong track record as a lazy portfolio, 30+ years running:

General info on PP
http://crawlingroad.com/blog/2008/12/13/a-permanent-portfolio/

PP wins 2008 portfolio smackdown – beat returns offered by ALL professionally recommended asset allocation strategies:
http://crawlingroad.com/blog/2009/01/05/permanent-portfolio-wins-2008-lazy-portfolio-smackdown/

The fund that approximates a “permanent portfolio” type allocation for you is call sign “PRPFX” but you could approximate the Permanent Portfolio on your own with lower fees and a small amount of legwork. Here is one suggested constructs:
http://seekingalpha.com/article/274266-building-a-permanent-portfolio-using-etfs

Research further to your heart's content at the Bogleheads forum or Gyroscopic investing.

 

[Spanky]

PRPFX has a very impressive return for the last decade. However, there are many critics doubt that such return will be repeated for the next decade.

 

[NW-Bound]

Harry Browne's "Permanent Portfolio" has an extremely strong track record as a lazy portfolio, 30+ years running

PRPFX has done well in the last 10 years.

According to Morningstar, if one put $10K into PRPFX on 1/03/2002, he would have $28,742 today (1/03/2012). If he invested in the Vanguard S&P index, he would have $13,209.

But prior to that, PRPFX was not that great.

Again, Morningstar shows that if an investor put $10K into PRPFX on 12/01/82, he would have $69,775 today (1/03/2012). If he put that into Vanguard S&P index, he would have $183,105.

Check out at Morningstar Stock, Mutual Fund, Bond, ETF Investment Research for yourself.

Going forward, which one will win? Your guess is as good as mine.

 

[Focus]

I didn't like the Asset Allocation fund component of LifeStrategy Moderate growth else I probably would have stuck with it.

Same here, but that's been fixed. The Asset Allocation Fund is gone. As of 11/30/11 (per Vanguard's site) LifeStrategy Moderate Growth consists of:

Vanguard Total Stock Market Index Fund Investor Shares 42.7%
Vanguard Total Bond Market II Index Fund Investor Shares 39.2%
Vanguard Total International Stock Index Fund Investor Shares 18.1%

It's now a good all-in-one lazy portfolio (nontaxable portion), in my opinion.

 

[okapi]

LifeStrategy Fund [like the new changes in these funds] Wellesley,and a Short-Term Bond Fund.Thats all folks.

 

[almost there]

VTTVX the ultimate lazy fund?

 

[MichaelB]

If someone is looking for a one fund lazy portfolio I would recommend choosing between Wellington or Wellesley.

 

[l2ridehd]

Last year I put all my wife's money in Noobs slice and dice 6 fund portfolio at lazytraders.com. My own money is mostly vanguard index funds with a tilt to small cap and dividend funds, with more in total bond then in TIPS and a few individual stocks. Now my timinig was good for her's, but with no tweaking or watching or touching in any way, her's beat mine by a small amount. Even with the downside results in international stocks, I still like that set of funds. Simple, well diversified, little re-balancing required, and seems to cover all the bases. I just might move in that direction with my own investments this year.

 

[Midpack]

If someone is looking for a one fund lazy portfolio I would recommend choosing between Wellington or Wellesley.

I would agree except, it's only placing assets to take advantage of taxes that prevents me from doing so. If I didn't have sizeable tax sheltered holdings, I'd have no reason not to simplify and Wellington and Wellesley are clearly stellar choices. And even with taxable and tax sheltered accounts, it would not be hard to live with only 3-4 funds IMO (Tot Mkt, Tot Int, Tot Bonds for example).

 

[Lisa99]

Lazy is the way we went after escaping from Ameriprise. Went from >20 funds to just 4 spread across 401k, taxable and IRA accounts.

Our returns are better in the lazy portfolio and obviously our expense ratios are much lower.

Even if I had the time to dabble in the market, I'd still go the lazy way...just don't have an interest in doing all of the required research.

 

[ripper1]

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.

I believe the 2nd grader portfolio works best for me. VTSAX, VTIAX, and VBTLX. These are the Admiral shares for Vanguards total stock, total int., total bond. AA at 35/15/50 to give you a 50/50 total stock to bond balance and extremely low ER of .11 Total diversification and very simple.

 

[ripper1]

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)

Doesn't Wellesly and Total Stock hold some of the same funds or are you also using Wellesly for more yield?

 

[web_diva]

PRPFX has a very impressive return for the last decade. However, there are many critics doubt that such return will be repeated for the next decade.

Yes, there are a lot of criticisms about PRPFX; the most relevant one to this thread being that it doesn't closely enough model Harry Browne's permanent portfolio so results may not be akin to adhering to a purist version of his model. It has some REITs whereas Browne's is constructed as follows:

25% – Stocks (S&P 500 Index)
25% – Long Term US Treasury Bonds
25% – US Treasury Money Market Fund
25% – Gold

This link has results of a pure Browne portfolio constructed with ETFs (as well as others' interpretations) through 2011 so thought I'd post it. Nice to have results for such a long span, 1972-2011!
http://madmoneymachine.com/ ßin right sidebar, see “2011 Lazy Portfolio Results’

 

[pb4uski]

I have five different securities. Would only have four but my 401K doesn't have many options.

Vanguard Total Bond, High Yield Bond, Total Stock and Total International Stock (all Admiral shares)
Harbor Bond in 401k

Does that make me lazy?

 

[pimpmyretirement]

I dunno what all these ticker symbols you guys are talking about are, but I just buy the vanguard target retirement fund. It's named after my goal, how could I go wrong?

I have not been able to figure out something I think is smarter and justifies the extra effort, given the amount I have invested and the time I have available.

 

[Mulligan]

This has been a good thread to get me thinking. I have a pension I live off of easily, but still need to protect from inflation and maybe any other problems down the road. Although I enjoy reading about the market and understand it fairly well, I have never been a particulary good investor. I want to be partially aggressive and safe at the same time, and yet be simple. Im just going to invest in the Vanguard Life Strategy Growth Fund, and continue to max out the I Bonds. If in my lifetime CD's ever creep above the inflation rate, I will put more into those, while continuing to keep what I have now in them dispite their present low rate, which will go even lower next year when most mature, Im sure.

 

[nun]

I started doing a 3 fund Lazy portfolio with Vanguard before they started the Target Date funds. Then I added Wellesley and I've been happy with my 4 fund approach. I may simplify to a Vanguard Target date fund and Wellesley. I keep Wellesley because I like the investment style and the results.

 

[Ronstar]

I'm thinking of consolidating my non-401k and non-ira investments into a 3 or 4 fund lazy portfolio at Vanguard. $ would be transferred from an annuity, cd, 2 checking accounts, savings, a reit, one single stock that I inherited, and a brokerage account. I'm going to set up DW an offshoot account for her mad money. It looks like there will be a lot of paperwork involved. Has anyone had experience with Vanguard's customer service as it relates to transfers & fund/allocation suggestions(financial plan)?

 

[Midpack]

I'm thinking of consolidating my non-401k and non-ira investments into a 3 or 4 fund lazy portfolio at Vanguard. $ would be transferred from an annuity, cd, 2 checking accounts, savings, a reit, one single stock that I inherited, and a brokerage account. I'm going to set up DW an offshoot account for her mad money. It looks like there will be a lot of paperwork involved. Has anyone had experience with Vanguard's customer service as it relates to transfers & fund/allocation suggestions(financial plan)?

I had a painless transfer of all my holdings from Fidelity to Vanguard about 10 years ago, and subsequently rollovers of my 401(k) and a small pension lump sum, also to Vanguard. They pretty much handled everything for me, so I was pleased.

They also offered a complete analysis of my holdings and provided their detailed recommendations, it was completely free (depends on your total $ assets) including a detailed printout and a follow up phone call. If your investing philosophy leans toward the Bogle philosophy, mine does, the analysis should be worthwhile. If your investing philosophy is more active and aggressive, I don't think they will make recommendations along those lines.

And a similar analysis is available online at all times once you're a customer, I think it's called Portfolio Analyzer and there are other Performance measures you can access.

 

[BigMoneyJim]

I've only done it with 401(k) rollovers so far, but my experience and my readings indicate that the receiving institution will take care of all the paperwork for you and is more responsive than if you try to start with the institution you're withdrawing from.

 

[pb4uski]

I did something similar with VG years ago - they make it very easy. I am a happy VG customer for 20 years.

 

[Ronstar]

Thanks Midpack, Bigmoneyjim & pb4uski

It's good to know that they'll help me with the transfers. I'll give them a call this afternoon