The Ideal Simple Portfolio

[ferco]

Has anyone on this forum come up with a "simple straight-forward" portfolio that has yielded enough to allow for the magic 4% SWR and maintain and modestly grow a 1 million dollar principal over 10-20 years.
I don't mean a long drawn out discussion of high-tech convoluted formulas or those requiring credentials as a CFP, CPA or a PhD in higher mathematics to understand.
Would the "CoffeeHouse" portfolio fit the bill over time, say 10, 20 or 30 years through all the ups and downs of the market; would it have survived the period 2000-now?

 

[mathjak107]

i just put some of my portfolio in the ole harry browne permanent porfolio.. nothing simpler or more bullet-proof .. covers all 4 economic conditions we could ever hit. since lately it looks like anyone of them can pan out.

prosperity

inflation

recession

depression/deflation


25% gld gold
25% tlt long term treasuries
25% vti total market index
25% us treasury money market

rebalance once a year or when any catagory rises or falls 10%..

 

[ferco]

mathjak107......have you or anyone on the forum actually utilized the Harry Browne portfolio with LONG TERM (10-20 years) success?

 

[LOL!]

Re: HB: What? No foreign investments?

For simplicity, one could go with a target retirement or fund of funds or balanced funds. But that will cost you in a taxable account.

For me, I like a little more complication: fill up tax-advantaged with fixed income, REITs, commodities, small cap value. Use tax-efficient in taxable which means things like VTI (total US index) and VEU (all-world ex-US index).

And "simple straight-forward" is in the eyes of the beholder. There are lots of suggestd portfolios at FundAdvice.com - Home that meet the OPs criteria. None of the portfolios need more than 4th grade math to understand, so neither a CPA, a CFP nor a PhD are needed.

 

[In-control]

I am currently running with a 40% stock(Large cap./Small cap./International), 40% bond(Corp., Total Bond Idx) and 20% short term cash(upto 5 yrs of my house hold budget). Most of my $ is in Index funds & Vanguard Wellington. If you want a 50/50 split you can go with Vanguard Wellesly. Try reading the book "work less - live more" It breaks down the allocation over time nicely.

Good luck

 

[Rich_by_the_Bay]

Smartest Investment Book You'll Ever Read - Solin

Basically, total stock, total bond, MMF

 

[yakers]

Are all the funds taxable? That might change things. What I decided to do is put the bulk of my 401k type account (Federal Thrift Saving Program) into a target retirement account which is made up of a total US market, total foreign, total US bond and a stable value fund. And the asset allocation gets more conservative as I get older. Target retirement funds are still new and have not been tested through several financial cycles but they look really appropriate to me. Keep the fees low, the indexes wide and an AA you like and let it run. Go out and live life and stop checking your accounts too frequently. I'll let you know how it worked out in 30 years.

 

[Midpack]

There is no one answer, but Coffeehouse is certainly one solid, simple plan. I also like Scott Burn's Couch Potato and it's variations. There are others as well. And for the ultimate hands-off, you can put everything in Vanguard Target Retirement or Managed Payout, Fidelity Freedom or Asset Manager and have someone else manage everything for you. Whatever you do, watch your expense ratios and as another poster already noted, where you place holdings depends on whether or not you have taxable and tax-sheltered accounts to work with. Good luck...

 

[mathjak107]

mathjak107......have you or anyone on the forum actually utilized the Harry Browne portfolio with LONG TERM (10-20 years) success?

doing it right now... tried it many many years ago but got bored.. i was much to young at the time for such a conservative mix. remember its for preserving capital and purchasing power, not so much for growth... back testing it though over 20 years has it doing its job well.

 

[mathjak107]

Re: HB: What? No foreign investments?

For simplicity, one could go with a target retirement or fund of funds or balanced funds. But that will cost you in a taxable account.

For me, I like a little more complication: fill up tax-advantaged with fixed income, REITs, commodities, small cap value. Use tax-efficient in taxable which means things like VTI (total US index) and VEU (all-world ex-US index).

And "simple straight-forward" is in the eyes of the beholder. There are lots of suggestd portfolios at FundAdvice.com - Home that meet the OPs criteria. None of the portfolios need more than 4th grade math to understand, so neither a CPA, a CFP nor a PhD are needed.

no foreign in harry brownes pure mix. to much currancy risk good or bad to count on reliably for gains. foreign markets may sore but if the dollar does to you may not benefit.

 

[Ronnieboy]

There is an article in Money magazine this month (June '08?) that lists the only 7 funds you need to maintain diversification. I haven't read the complete article, just thumbed through it.

 

[unclemick]

Vanguard's Target Retirement Series.

heh heh heh - Now if you have longer than a 20 yr horizon and are dollar cost averaging - Vanguard's TSM Index (total stock market). Faith and time in the market. Don't waste time reading books or thinking. .

'God Looks After Drunkards, Fools and The United States of America.'

Put as much in as early as you can and let it compound as long as you can.

 

[walkinwood]

Bob Clyatt's studies on the 4%/95% plan using a pretty simple portfolio (8 funds) shows that it has a 90%+ chance of maintaining purchasing power of the initial portfolio over 40 years.