Note again though that this is a high-risk portfolio that is likely better suited for investors with a high risk tolerance and a long time horizon. All information on this site is provided free of charge (with the exception of books for sale) and is funded in full by The Merriman Financial Education Foundation. Paul's Mutual Fund Recommendations For Vanguard Updated January 4, 2021 Vanguard Tax Deferred Portfolios * The Tax-managed Small-Cap Admiral Shares (VTMSX) are used, rather than Small-Cap Index (VSMAX), as VTMSX has much smaller average size companies and more deeply discounted value companies. I think the bloom is off the rose. At global market weights, U.S. stocks only comprise about 50% of the global market. The key is that any of the above Lazy Portfolios should be a core part of a long-term, buy and hold investing strategy. The Paul Merriman 4 Fund Portfolio, as the name suggests, is a lazy portfolio designed by Paul Merriman that utilizes equal weightings of 4 assets. Its just a great option if you want to make sure youre getting the best there is out there! The current year is excluded from calculations. Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2023), HEDGEFUNDIEs Excellent Adventure (UPRO/TMF) A Summary, Golden Butterfly Portfolio Review and M1 Finance ETF Pie, David Swensen Portfolio (Yale Model) Review and ETFs To Use, 53 Lazy Portfolios and Their ETF Pies for M1 Finance (2023), VIG vs. VYM Vanguards 2 Popular Dividend ETFs (Review), Warren Buffett ETF Portfolio (90/10) Review and ETFs (2023), Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2023), Paul Merriman Ultimate Buy and Hold Portfolio Review, M1 Pie (2023), The Best M1 Finance Dividend Pie for FIRE & Income Investors, The 7 Best Small Cap ETFs (3 From Vanguard) for 2023, 9 Best International ETFs To Buy (6 From Vanguard) in 2023, The 3 Best Inverse ETFs to Short the S&P 500 Index in 2023, Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review, NTSX ETF Review WisdomTree U.S. Do your own due diligence. He also thinks that this strategy is appropriate for those who dont invest for a living, and the approach avoids high fees and expenses. The inclusion of international bonds in diversified portfolios and target date funds is a fairly recent occurrence. RSSB ETF Review Return Stacked Global Stocks & Bonds ETF, Fees, Trees, & Forests Stop Obsessing Over Expense Ratios, Optimized Portfolio Best in Class ETFs List for 2023, 7 Best Covered Call ETFs for Income Investors in 2023, Roth IRA vs. The potential drawbacks of this portfolio is that is is exclusively invested in the U.S. when many believe international diversification is helpful and its high exposure to stocks could cause major swings in performance. Vanguard Target Retirement 2045 Fund Chris came through, creating what we call the Worldwide Four-Fund portfolio. CAGR since 1989: This shows the compounded annualized growth rate since 1989. The Paul Merriman 4 Fund Portfolio is a simple, equal-weighted equities portfolio that tilts toward small caps and Value stocks. Ill also include how long it would take to become a millionaire at that rate assuming one maxed out an IRA ($6,000 in 2021). By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. This website uses cookies to improve your experience. Here's a performance backtest of the Merriman 4 Fund Portfolio from 1972 through 2022:Source: PortfolioVisualizer.com. are for illustrative purposes only. : 12 Simple Ways to Supercharge Your Retirement, Check out my flat-fee-only fiduciary friends over at Advisor.com, Portfolio Asset Allocation by Age Beginners To Retirees, How To Buy Zoom Stock With $100 How To Invest in Zoom, Bogleheads 2 Fund Portfolio for Purists & Minimalists (2023). In this article, I provide hard facts about how my second-guessing, Read More The Cost of Second Guessing Trading Strategies (Why You Need A Written Trading Plan and Log)Continue, Last Updated on April 18, 2023 High Probability ETF Trading, published in 2009 and written by Larry Connors and Cesar Alvarez, contains some interesting strategies. Then because VOOs inception date is more recent than VFINX, I used VFINX to represent the S&P 500. How $10,000 will help my newborn granddaughter have a better retirement, Help your teenager turn $500 into nearly $2 million, How to buy 10 years of retirement for $3,650, The Merriman Financial Education Foundation, Vanguard Tax-Managed Small-Cap Admiral Shares *, Vanguard Small-Cap Value Index Admiral Share, Vanguard Developed Markets Index Admiral Shares, Vanguard FTSE All-World ex-US Small Cap Index Admiral, Vanguard Emerging Mkts Stock Index Admiral Shares, Vanguard Global Ex-US Real Estate Index Admiral Shares, Short-Term Government Bond Index Admiral Shares, Intermediate-Term Government Bond Index Admiral Shares, Short-Term Inflation-Protected Securities Index Admiral Shares, * The Tax-managed Small-Cap Admiral Shares (VTMSX. Check out my flat-fee-only fiduciary friends over at Advisor.com. The theory and mechanics underlying the composition of the 4 Fund Portfolio is the same as that of the 3 Fund Portfolio. The volatility and risk reduction benefits are another conversation entirely, which is of huge significance for a retiree. The 60/40 portfolio delivered steady returns for nearly a decade - then cratered in 2022. If you are looking for target-date funds, be sure to check out our growing Target Date Fund Portfolio overview. You can find them here. Ben Felix Portfolio * The Tax-managed Small-Cap Admiral Shares (VTMSX)are used, rather than Small-Cap Index (VSMAX), as VTMSX has much smaller average size companies and more deeply discounted value companies. How To Beat the Market Using Leverage and Index Investing, 8 Reasons Why Im Not a Dividend Income Investor, M1 Borrow Review (How M1s Margin Loan Works), The 10 Best ETFs for Retirement Portfolios in 2023, The 4% Rule for Retirement Withdrawal Rate A Revisitation, Sequence of Return Risk in Retirement Explained. As Proposed by Bill Schultheis, author and investment adviser. It turns out that all the gains in oil and energy stocks since 1986 have come from December until the end of, Read More How To Trade And Invest In Oil Stocks (Trading Strategy And Seasonality)Continue, Last Updated on April 18, 2023 The proportion of adult Internet users who use social media platforms is approaching 75%, and this figure is growing. Save my name, email, and website in this browser for the next time I comment. These cookies will be stored in your browser only with your consent. This high-performing portfolio is part of Portfolio Einstein, Premium Portfolios. David Swenson Yale Portfolio This and the two portfolios below are part of his best-in-class portfolios. But all fundamentally recognize the value of having some bonds in your portfolio. I don't employ or advise market timing, butAQR maintainsthat Value is basically the cheapest it's ever been right now relative to history, suggesting that now may actually be theworsttime to give up on the factor, and that it's due for a comeback. Merriman has provided the facts on his website: US small cap (US SCB) and US small cap value stocks (US SCV) have outperformed S&P 500 massively! I am just wanting to understand your thinking on this. Search the website Podcast Fixed distributions 2023 MarketWatch Article -coming soon Tables Table D1.3 Fixed Distributions: S&P Equity Portfolio-initial distribution $30,000 Table D1.4 Fixed Distributions: The same but initial distribution $40,000 Table D1.5 Fixed Distributions: The same but initial distribution $50,000 Table D1.6 Fixed Distributions: The same but initial distribution $60,000 . Furthermore, you need to backtest a lot! This 4-fund combo seems to provide a slight advantage. The podcast references information on 8 different distributions tables: Table D1.3 Fixed Distributions: S&P Equity Portfolio-initial distribution $30,000 Past performance does not guarantee future results. The Merriman Financial Education Foundation is a registered 501(c)(3) organization founded in 2012. Manage Settings Without currency hedging, it's basically FOREX trading. Id say in between 1 and 5 years. He strongly advocates index investing and believes most investors are better off with a simple, diversified portfolio of low-cost index funds. Past performance does not guarantee future results. Every year, every 5 years, every 10 years? The work he is doing now is strictly non-profit. Finally, the Warren Buffett Portfolio embodies Steve Jobs philosophy that simplicity is the ultimate sophistication. All information on this site is provided free of charge (with the exception of books for sale) and is funded in full by The Merriman Financial Education Foundation.Anyone wishing to use this educational information in web-based or printed materials are welcome to do so with the following attribution and link: This information freely provided courtesy ofPaulMerriman.com. We would also appreciate a copy and link of where it has been published via email. VOO vs. VOOV vs. VOOG Vanguard S&P 500, Value, or Growth? Do You Like Backtesting And Want To Write? Core 4 80/20 Portfolio VT vs. VTI Global Stock Market vs. Total U.S. Stock Market. Merriman founded his own investment advisory firm, Merriman Wealth Management, in 1983, where he worked with clients to develop customized investment strategies based on their individual goals and risk tolerances. The strategy of investing in multiple asset classes and among many securities in an attempt to lower overall investment risk. How often should we adjust bonds to match our age -20? The current year is excluded from calculations. Read my lengthier disclaimer here. Again, theres no consensus here, some would exclude these assets entirely, but those that include favor allocations to real assets in the 10% to 20% range. Opinions expressed by Forbes Contributors are their own. The logic and reasoning behind the strategy is not flawed; we expect the portfolio to outperform later. See the full list here. Below you can see how you build Paul Merrimans Ultimate Portfolio with ETFs. See the full list here. As such, over the time period measured for this article, the portfolio has lagged a bit. document.getElementById("ak_js_1").setAttribute("value",(new Date()).getTime()); Sign up to receive email updates when a new post is published. CAGR for S&P 500: 10.00 %; Merrimans 4 fund portfolio: 9.28. We'll assume you're ok with this, but you can opt-out if you wish. Paul Merrimans Ultimate Portfolio can be built with 10 ETFs. Save my name, email, and website in this browser for the next time I comment. 4 VIX trading strategies What Is The VIX Index And How Does It Work? Further, there. This potential diversification benefit is even less convincing for a portfolio that is not bond-heavy. The ultimate portfolio no longer sports bonds. This is below the CAGR of S&P 500 during this period, and thus the Merriman 4 fund portfolio has underperformed. Historically, small caps have offered higher returns than large caps, and value stocks have proved to return slightly better than growth stocks. You mention the need the general theory of the need for more international exposure, but this version of the 4 fund portfolio has less. International stocks don't move in perfect lockstep with U.S. stocks, offering a diversification benefit. Note, however, that it comes with more risk. I wrote a comprehensive review of M1 Finance here. You also have the option to opt-out of these cookies. I am a big fan of Paul Merriman and the great work he is doing. Merriman founded an investment advisory firm in Seattle in 1983, from which he has since retired. We got the following equity curve: The annual return was 10.6%, and the max drawdown was 39%. were used where a portfolio calls for US equities, emerging market equities, etc. Paul Merrimans Ultimate Portfolio: 10 X 10 = Winner? Investment products discussed (ETFs, mutual funds, etc.) One of Merrimans key contributions to the world of investing is his development of a number of low-cost, passive investment portfolios designed to provide investors with broad diversification and low fees. Together with Chris Pedersen, Paul Merriman has constructed what he calls theultimate target-datefund. You can find asset allocation for the rest of Paul Merrimans portfolios below. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. The portfolios represent a great opportunity for you to get more money from your investment portfolios. It consists of just two asset classes: an S&P 500 index fund and a short-term U.S. government bond fund. Privacy Policy. In this era of social investing/trading, Twitter, Read More The Twitter Trading StrategyContinue, Last Updated on April 18, 2023 During my twenty years of trading, I have learned that the best recipe for success is to follow and execute my trading plan. Merriman is also known for his work as an educator and advocate for individual investors. Buffett Estate Plan Fund The portfolio is 100% stocks and is thus considered more risky than his Ultimate Buy and Hold Portfolio. It's exposed for 100% on the Stock Market. Larry Swedroe suggests, based on a 2014 Vanguard paper, that investing in foreign bonds may be prudent for reducing portfolio volatility if and only if the investor can do so with low fees and with currency hedging to eliminate currency risk. Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. Click here for more information. During the period 1970 to 2008, an equity portfolio of 80% U.S. stocks and 20% international stocks had higher generalandrisk-adjusted returns than a 100% U.S. stock portfolio. Vanguard has a useful tool here to help you choose. Where can I learn more about Paul Merriman? AND, while Im at it, you have the wrong definition of risk. Merriman suggests that this 4 fund portfolio can indeed provide a comeback after all the recent market volatility. It turns out many experts have come up with portfolios that they would, and often do, implement for themselves or their loved ones. One of them is Paul Merriman 4 Fund Portfolio. VT vs. VTI Global Stock Market vs. Total U.S. Stock Market. Many articles contain specific investment rules that can be backtested for profitability and performance metrics. Paul Merriman is a financial advisor and has presented several low-cost passive investment strategies. No more than 5. Saw this posted a few months ago. Trading requires, Read More How To Find and Generate Trading Ideas (What Are Trading Ideas? Value stocks beat Growth stocks and small stocks beat large stocks in 2021 and 2022, so that comeback may be happening. Below you can see the returns of Paul Merrimans portfolios. However, I'm also starting late and could use a leg up. Yield: This is the expected dividend yield of the portfolio. All information on this site is provided free of charge (with the exception of books for sale) and is funded in full by The Merriman Financial Education Foundation. Paul A. Merriman Three all-star equity portfolios Getty Images/iStockphoto Referenced Symbols SPX -0.81% Since the mid-1990s, I have been teaching investors that the very best way to. This site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. How I Made A Bollinger Band Strategy Using ChatGPT (Backtest), Financial Fitness Forever: 5 Steps to More Money, Less Risk, and More Peace of Mind, Get Smart or Get Screwed: How To Select The Best and Get The Most From Your Financial Advisor. And this is just talking about performance. VOO vs. VTI Vanguard S&P 500 or Total Stock Market ETF? Paul Merriman Four Fund Portfolio The standard deviation of Merriman's portfolio, when rebalanced annually, weighs in at 18.5%, compared to 16.9% for the S&P 500. If you want access to our high-performing portfolios then you want to take a look at the premium portfolios. (Photo by EyesWideOpen/Getty Images), Vanguard Total Stock Market Index Fund (VTSAX), Vanguard Total International Stock Index Fund (VTIAX), Fidelity Total International Index Fund (FTIHX). Disclosure: Some of the links on this page are referral links. These are high-returning portfolios designed to last a lifetime. Paul Merriman 4 Fund Portfolio Asset Allocation, Paul Merriman 4 Fund Portfolio ETF selection, Paul Merriman 4 Fund Portfolio historical performance, Paul Merriman 4 Fund Portfolio ETF backtest and performance, Compounding The Magic Of A Long-Term Mindset And Delayed Gratification, How I Created A Trend Following Trading Strategy Using Python (Backtest And Code), How To Trade The End Of Month Bias In Stocks. This website uses cookies to improve your experience while you navigate through the website. Assuming a retirement age of 60, my general rule of thumb is to use [age-20] for bond allocation, obviously titrating up or down based on risk tolerance. It's well documented that small-cap and value stocks have outperformed over the long haul. Necessary cookies are absolutely essential for the website to function properly. How to construct a comeback portfolio, Ultimate Buy and Hold 4 Fund Combo Tables 2020, Quilt ChartsFixed Income Returns (1928-2020). What are some alternatives to Paul Merrimans portfolios? Paul Merrimans portfolios are characterized by one of two features: Paul Merrimans portfolios have evolved over the years. The portfolio consist of the following assets: For our backtest (see more below), we chose the following ETFs: There is a reason why Paul Merriman suggested the exact portfolio composition as he did. If you would like to change your settings or withdraw consent at any time, the link to do so is in our privacy policy accessible from our home page.. This portfolio comes from Mr. Buffetts 2013 letter to Berkshire shareholders. About - My Toolbox - Privacy - Terms - Contact. You can also subscribe without commenting. His ultimate portfolio is a beautiful example of how diversification can bring higher returns without higher risk. Following some of your thoughts regarding the superiority of government bonds to corporate youve written about elsewhere, and a preference for long term at that what would you think of replacing BND with GOVT, or EDV, or SPIP, or LTPZ? Vanguard Target Retirement 2025 Fund Vanguard Tax-Managed Small-Cap Admiral Shares, Vanguard FTSE All-World ex-US Small Cap Index, First three to six months worth of living expenses, Vanguard Short-Term Corp Bond Index Admiral, Funds in excess of three to six months of living expenses, Vanguard Intermediate-Term Corp Bond Index Admiral. Paul Merriman is a financial educator, author, and investment advisor. read. We have written over 1200 articles on this blog since we started in 2012. The evidence seems to show that international bonds may offer a small diversification benefit in terms of credit risk on the fixed income side due to their low correlation with both U.S. stocks and U.S. bonds, but theres no compelling reason to think it's any significant benefit. No representation, warranty or undertaking, stated or implied, is given as to the accuracy or completeness of the information contained herein. 1. Called Lazy Portfolios, these investment strategies work if you have $100 or $100 million to invest. Lump Sum Investing (DCA vs. LSI), How To Invest Your HSA (Health Savings Account), Factor Investing and Factor ETFs The Ultimate Guide, Paul Merriman Ultimate Buy and Hold Portfolio. I wanted to repost it and see if I can get any knowledgeable opinions to it. You can also subscribe without commenting. Given that, for the sake of simplicity in this post, let's assume a starting age of 20 and a retirement age of 60, yielding an average investor age of 40. You also have the option to opt-out of these cookies. The main idea behind the holdings is to capture risk premiums based on long-term evidence. Jack Bogle Was Wrong About These 3 Things, I Bonds Explained (US Savings Bonds) Ultimate Guide (2023), Sharpe Ratio vs. Sortino vs. Calmar Risk Adjusted Return, Portfolio Risk Explained How To Think About Risk and Volatility. The portfolio is 100% stocks and is thus considered more risky than his Ultimate Buy and Hold Portfolio. How to generate trading ideas is one of the most important issues for a trader. Paul Merriman has constructed a lot of portfolios. Don't subscribeAllReplies to my comments Notify me of followup comments via e-mail. One set of distributions uses the S&P 500 as the equity position while the other uses the U.S. 4-Fund Portfolio (25% each of S&P 500, Large Cap Value, Small Cap Blend and Small Cap Value). Investors are free to choose their own US/intl allocation. Maintaining your portfolio is also daunting. John,Just Portfolio Visualized Paul Merrimans 4 Fund portfolio using the funds you suggest. How It Works & How to Invest in It, How To Invest in an Index Fund The Best Index Funds, Portfolio Diversification How To Diversify Your Portfolio, Dollar Cost Averaging vs. My own personal portfolio tilts toward both of these factors. Im curious as to why you use allocations that are so different than those for the 80/20 on the the Bogleheads site. For more information, please see our Traditional IRA Which Is Better for You? What is Paul Merrimans 4 Fund Portfolio? Paul Merriman is an evidence-based investor and favors statistics over feelings. Do, Read More Larry Connors RSI 25 & RSI 75 (It Still Works) | Trading StrategiesContinue, Last Updated on April 18, 2023 How To Find and Generate Trading Ideas. We also use third-party cookies that help us analyze and understand how you use this website. Select portfolio: Can you share an idea based on your analysis about what foreign equity EFT(s), and what allocation, might compliment the Merriman 4 Fund Portfolio? Value funds havent outperformed growth and the S&P since 2004. That noted, the relative performance over a lengthy period seems to compare favorably with the S&P 500 Index. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit. https://www.bogleheads.org/wiki/Vanguard_four_fund_portfolio. Read more here. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. https://www.bogleheads.org/wiki/Vanguard_four_fund_portfolio, Ray Dalio All Weather Portfolio Review, ETFs, & Leverage (2023), HEDGEFUNDIEs Excellent Adventure (UPRO/TMF) A Summary, Golden Butterfly Portfolio Review and M1 Finance ETF Pie, David Swensen Portfolio (Yale Model) Review and ETFs To Use, 53 Lazy Portfolios and Their ETF Pies for M1 Finance (2023), VIG vs. VYM Vanguards 2 Popular Dividend ETFs (Review), Warren Buffett ETF Portfolio (90/10) Review and ETFs (2023), Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2023), Paul Merriman Ultimate Buy and Hold Portfolio Review, M1 Pie (2023), The Best M1 Finance Dividend Pie for FIRE & Income Investors, Portfolio Asset Allocation by Age Beginners To Retirees, The 7 Best Small Cap ETFs (3 From Vanguard) for 2023, 9 Best International ETFs To Buy (6 From Vanguard) in 2023, The 3 Best Inverse ETFs to Short the S&P 500 Index in 2023, Ben Felix Model Portfolio (Rational Reminder, PWL) ETFs & Review, NTSX ETF Review WisdomTree U.S. Historically, small cap and value have performed extremely well. He has created a variety of resources to help investors understand and implement evidence-based investment strategies, including podcasts, online courses, and educational videos. To be precise, Merriman aimed at size and value factors. At other times the 3-fund portfolio will outperform. Therefore, if you want similar diversification, then have a look at the IFA portfolios or some of David Booths portfolios. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. No single country consistently outperforms all the others in the world. Maybe you just went with what was already in the M1 Pie? Content on this website should not be used when making investment decisions. Watch it here:Watch this video on YouTube. Each asset class has a role to play: the long-term bonds will perform well during deflation; stocks will do well during times of economic growth; Treasury Bills will hold up during recessions and gold is helpful during times of inflation. In other words, if you can handle the volatility, Merriman's portfolio may be a sound option. Canadians can find the above ETFs on Questrade or Interactive Brokers. Opinions expressed by Forbes Contributors are their own. Remember that his portfolios are very diversified into many asset classes, or they are very concentrated into a few of the best historically performing asset classes. Impossible to know the future. Link to his website article: https://paulmerriman.com/market-got-you-down-how-to-construct-a-comeback-portfolio/, Link to original post: https://www.reddit.com/r/Bogleheads/comments/l6jw7p/thoughts_on_paul_merrimans_4fund_portfolio/, Scan this QR code to download the app now, https://paulmerriman.com/market-got-you-down-how-to-construct-a-comeback-portfolio/, https://www.reddit.com/r/Bogleheads/comments/l6jw7p/thoughts_on_paul_merrimans_4fund_portfolio/. : 12 Simple Ways to Supercharge Your Retirement. I write about building wealth and achieving financial freedom. He has a number of variations of his portfolios, but here we take Portfolio #7 as described here which captures all his main insights on equity asset classes. Can I change the international bond fundFor emerging markets bond funds? Of course, many people are skittish about owning funds with companies based outside the United States. Podcast Portfolio data was last updated on 11th of April 2023, 06:22 ET. Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. What Is the Paul Merriman 4 Fund Portfolio? As the name suggests, it consists of just three asset classes: How much an investor allocates to each asset class will depend on their risk tolerance and investing time horizon. I wouldnt call it a problem but it is arguably suboptimal, though we cant say for sure. If you're looking for income then you should look at this list of the 20 best income portfolios. Please note that past performance is not a guarantee of future returns. Which portfolio is best - Ray Dalio's All-Weather portfolio or the Permanent portfolio? Paul Merriman 4 Fund Portfolio historical performance. Portfolioeinstein.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.Disclaimer: There are many factors that go into choosing your right portfolio. Vanguard published another paper in 2018, proposing that various local market risk factors (such as interest rates, inflation, and yield curves) have resulted in relatively low correlations of government bond yields across markets over the past 50 years, suggesting a diversification benefit to increasing the number of global markets in a fixed income allocation. While the research is comprehensive, the tiny diversification benefit they illustrate is negligible in my opinion. The Bogleheads 4 Fund Portfolio is globally diversified across stocks and bonds. Vanguard didn't begin including international bonds in their target date funds until 2013. By holding all four together you can, in theory, deal with anything that the economy throws at you and still have at least one part of your portfolio do relatively well. Based on that, a one-size-fits-most 80/20 allocation for the Bogleheads 4 Fund Portfolio is: My data for the total international bond market only goes back to 1999, so the backtest below is for the period 1999 through 2021, comparing an 80/20 Bogleheads 4 Fund Portfolio to the S&P 500 index.Source: PortfolioVisualizer.com, Given the short time period, CAGR's are pretty close, with the 4 Fund Portfolio having a higher risk-adjusted return from lower volatility and smaller drawdowns:Source: PortfolioVisualizer.com. Since this includes Small Cap Blend, which includes Small Cap Growth, is that a problem per your reference here? The Coffeehouse Portfolio are for illustrative purposes only. Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs. Don't want to do all this investing stuff yourself or feel overwhelmed? We would alsoexpectfactors to have negative premiums from time to time, even for extended time periods. Some of the things that university endowments do are hard to replicate simply for the individual investor, such as owning private equity or investing in absolute return strategies, but when translated into accessible ETF-based asset classes, the average of Harvard, Stanford and Yales allocations look like the below.

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