Lazy Man Portfolios

[william the wie]

The Graham 2 pile passive portfolio from "The Intelligent Investor" and Harry S. Browne's 5pile portfolio are reasonably famous and can be set up with option hedges. I am just trying to figure out how complex the number of optionable equal piles can get. Any suggestions on areas other than lazy man portfolios to look for variants.

 

[SteadyMercury]

There are so many lazy man type variants, I'm not even sure what they are all named. I fly with one, it is basically:

small cap index
total intl stock index
total bond mkt index
total stock mkt index

Four is enough for me man.

 

[william the wie]

There are so many lazy man type variants, I'm not even sure what they are all named. I fly with one, it is basically:

small cap index
total intl stock index
total bond mkt index
total stock mkt index

Four is enough for me man.

Thank you sir.

 

[SteadyMercury]

Ooh = here is a comparison of returns from various:

Lazy Portfolios - Couch Potato Portfolios - AssetBuilder Inc., Registered Investment Advisor

 

[william the wie]

The ten speed looks interesting.

 

[SteadyMercury]

I think that chart would be more interesting with some measure of volatility. I mean isn't that really why we try to work our asset allocations, to find the right mix of best returns for acceptable risk? Otherwise it would be easy just pick the asset class that had the highest returns in history and go all in.

edit = actually he's got five year stdev in last col

 

[william the wie]

Not an objection to your view but I find it easier to think of these portfolios as a way of taking money out of relatively over valued positions and putting the money to work in relatively undervalued positions. But then I truly hate unhedged positions and unnecessary risk.

 

[SteadyMercury]

Yup, I'd assume anyone using a lazy man approach would at the very least rebalance annually to maintain the desired aa

 

[william the wie]

Yup, I'd assume anyone using a lazy man approach would at the very least rebalance annually to maintain the desired aa

Believe it or don't there are numerous studies claiming otherwise and they too are on MarketWatch. Me, I figure selling a call and buying a put for every round lot and 3-12 months out is the only way to make sure that rebalancing happens.

 

[SteadyMercury]

Most of rebalancing I can accomplish just by adjusting contributions since still in accumulation phase, although do also throw stuff around annually if that isn't sufficient.

 

[AmazonTania]

You can have a good portfolio for taxable allocations. It's like a mix between Allan Roth's Second Grader Portfolio and Larry Swedroe's Big Rock Portfolio, except your using a small-cap value tilt:

50% Vanguard Total Stock Market ETF (VTI)
20% Vanguard FTSE Emerging Markets ETF (VWO)
15% Vanguard FTSE Developed Markets ETF (VEA)
15% Vanguard Small-Cap Value ETF (VBR)

 

[william the wie]

You can have a good portfolio for taxable allocations. It's like a mix between Allan Roth's Second Grader Portfolio and Larry Swedroe's Big Rock Portfolio, except your using a small-cap value tilt:

50% Vanguard Total Stock Market ETF (VTI)
20% Vanguard FTSE Emerging Markets ETF (VWO)
15% Vanguard FTSE Developed Markets ETF (VEA)
15% Vanguard Small-Cap Value ETF (VBR)

Whatever floats your boat but some MLPs and REITs to reduce correlation would help to reduce portfolio volatility.

 

[MHunterB]

This has been an interesting read, folks - thanks!

We're currently pondering where to stash a rollover account of about 370K .... I'm primarily interested in stability on this one.....