In last two blog posts, we discussed two big problems with the all-weather portfolio, now the All-century portfolio, which Barry Ritholtz is willing to bet $100,000 that will outperform the all-weather portfolio.
All Century Portfolio
20 percent total U.S stockmarket
5 percent U.S. REITs
5 percent U.S. small cap value
15 percent Pacific equities
15 percent European equities
10 percent U.S. TIPs
10 percent U.S. high yield corpbonds
20 percent U.S. total bondmarket
This is a classic 60/40 portfolio!
To realize it, the following funds are proposed:
(VTI) Vanguard Total Stock Market ETF
(VNQ) Vanguard REIT ETF
(VBR) Vanguard Small-Cap Value ETF
(VPACX) Vanguard Pacific Stock Index Fund Investor Shares
(VEURX) Vanguard European Stock Index Fund Investor Shares
(AGG) iShares Barclays Aggregate Bond Fund
(VWEHX) Vanguard High-Yield Corporate Fund Investor Shares
(TIP) iShares TIPS Bond
Since one size does not fit all. For a younger investor with a longer timeline, a little more equity, such as a microcap fund and an international small-cap value fund can be added to replace the fixed income components.
A more conservative investor might want to have less equity and more bonds; They could combine the Pacific and European holdings into one holding such as iShares MSCI EAFE Index Fund (EFA), and end up with more bonds at the expense of equities.
In our next blog post, we will show you 3 ways to construct the all-century portfolio.
All Century Portfolio
20 percent total U.S stockmarket
5 percent U.S. REITs
5 percent U.S. small cap value
15 percent Pacific equities
15 percent European equities
10 percent U.S. TIPs
10 percent U.S. high yield corpbonds
20 percent U.S. total bondmarket
This is a classic 60/40 portfolio!
To realize it, the following funds are proposed:
(VTI) Vanguard Total Stock Market ETF
(VNQ) Vanguard REIT ETF
(VBR) Vanguard Small-Cap Value ETF
(VPACX) Vanguard Pacific Stock Index Fund Investor Shares
(VEURX) Vanguard European Stock Index Fund Investor Shares
(AGG) iShares Barclays Aggregate Bond Fund
(VWEHX) Vanguard High-Yield Corporate Fund Investor Shares
(TIP) iShares TIPS Bond
Since one size does not fit all. For a younger investor with a longer timeline, a little more equity, such as a microcap fund and an international small-cap value fund can be added to replace the fixed income components.
A more conservative investor might want to have less equity and more bonds; They could combine the Pacific and European holdings into one holding such as iShares MSCI EAFE Index Fund (EFA), and end up with more bonds at the expense of equities.
In our next blog post, we will show you 3 ways to construct the all-century portfolio.
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