Had a nice long detailed reply which I just accidentally deleted...
To From the Heart's original question, I just updated the book (Work Less Live More) for a new edition and there are no changes to the asset allocation and none are anticipated. Also, no one fund captures this portfolio, but some come close, including Wellington. But adding a few more funds seems so easy that I think most people won't mind in order to get the additional return/diversification benefits.
Rational Investing Portfolios aren't so much a specific asset allocation as they are a low-fee, index and value-oriented, widely diversified and low-volatility portfolio that you rebalance every few years and that you are comfortable holding.
My published ones in the book are not data mining but constrained optimizations based on reasonable bands for 16 recognized asset classes. Real data mining gives you weird portfolios with 90% gold and 10% japanese equities and the like.
Although the portfolio has returned over 10% per year for the past 20 years, my only goal was to do 8% after fees with volatility half that of the sp500, which I felt gave a good mix of risk and reward for me and other long-term retirees.
I get a lot of comfort in this investing approach from the fact that I didn't invent it -- just adapted it from what big institutions have been doing for some time. It's just that now this investing approach is accessible to the little guy for a reasonable <.35% p.a. fee. It's applied Modern Portfolio Theory that just says more diversification into credible but less-correlated asset classes and sub-classes gives you a bit of a free lunch -- a lower level of risk/volatility for a given level of expected return. Stick with a simple 60/40 SP500/TBond mix if you like, but the Rational Investing Portfolio matches that return with consistently less volatility over time for little or no additional effort.
For those who don't have the book, here is the recommended asset allocation -- a place to start tweaking based on your own biases and comfort level. Simpler ones are also listed in the book. (These work out to about 40% stocks, 40% bonds and 20% Other asset classes)
US Large (Value tilt) 12%
US Small (Value tilt) 8.5%
International Large 5%
International Small 10%
Emerging Markets 6.5%
ST Corporate Bonds and MM 4%
LT US Govt Bonds 4%
Medium term US Bonds 10%
Medium Term International 12%
GNMA Bonds 5%
High Yield Bonds 4%
Oil and Gas 3%
Market Neutral Hedge Fund 2%
Commodities 4%
Commercial Real Estate 5%
Venture Capital/Private Equity 5%
