Today I collected some model portfolios for the long term as has been proposed by some professionals on the web. If anyone is interested in back testing these portfolios or their own ideas - you may do so with icarra.com. You can build your portfolio with imaginary holdings from some point in time and then review how that portfolio behaved on a graph in comparison to indexes.
The idea behind reviewing model portfolios from professionals is to strive for simplicity when designing your own portfolio. When your goal is to reach aggressiveness or balanced approach - you would like to compare to what others have suggested.
As a frugal individual and following free advice given both on the web as well as in books, it is usually suggested to have a small amount of holdings (3 to 6 ETF-s for example) which are rebalanced every so often to meet current objectives. The simple idea is to minimize the cost of commission while still reaching a result comparable to main indexes. Another goal individuals seek is risk reduction. No one likes to loose money. Holding few ETF-s still provides you with the benefit of diversification which is a tool to reduce risk. Some say that using complex techniques (like using options) to reduce risk often accomplishes the opposite as human error and over confidence lead to disastrous results.
Here are the portfolios:
Zecco sample portfoliols: (at Zecco.com)
The page I’m referring to used to suggest some vanguard ETF-s, now it doesn’t, but the graphs are still useful. There are actually many different ETF-s from different companies to match the investment types - and anyone can pick from many different companies offering ETF-s. You may wish to use Bespoke’s ETF cheat sheet as well.
Aggressive Growth
| Small Cap | Mid Cap | Large Cap | Bonds | Cash | International |
| 17% | 23% | 36% | 4% | 8% | 12% |
Growth
| Small Cap | Mid Cap | Large Cap | Bonds | Cash | International |
| 15% | 20% | 34% | 8% | 10% | 13% |
Balanced Growth & Income
| Small Cap | Mid Cap | Large Cap | Bonds | Cash | International |
| 10% | 15% | 26% | 18% | 19% | 12% |
Conservative Income
| Small Cap | Mid Cap | Large Cap | Bonds | Cash | International |
| 10% | 13% | 15% | 31% | 26% | 5% |
Fidelity’s “Help Find a Mix” interactive portfolio design
Scroll between “less risk” and “more risk” to find a match. Then try and find ETF-s and/or mutual funds to allocate accordingly. You might just pick a hybrid mutual fund if you feel uncomfortable picking individual ones.
Here’s something “funny” - if you scroll all the way to “less risk”, fidelity tells you to hold everything in “short-term”, meaning - money market… (When did money market ever return 15.22% though?)
Top-Guns-Trading IRA/401k Advisor
On that site you will find several free portfolios to review. The portfolios include current and desired allocations based on market conditions. You will find models for:
- Aggressive Growth
- Balanced
- Global
- US Growth
You will have to create a user and password to view this report, but no payment is needed. I won’t copy any of that site’s content because I think it’s content is more proprietary. Other sites I’m linking to provide free models to lure you in for their services - and don’t require a user and password.
Roger Nusbaum’s 7/7/08: Portfolio Insulated From a Bumpy Ride
As mentioned before, I really enjoy Roger’s blog and I find his comments insightful and based on experience. His focus is always on managing risk in creative and alternative ways. Every now and then I try to track his suggested portfolios on “TheStreet.com”
| PBP | DNH | IGF | JJA | NARFX | RYMFX | TIP | BWX |
| 30% | 20% | 5% | 5% | 10% | 5% | 15% | 10% |
MSN Money’s 2 ETF portfolios from Tim Middleton and Richard Jenkins
Here’s Jenkins’ holdings:
| VTI | IYR | AGG | IYM | EFA |
| 32% | 14% | 19% | 13% | 20% |
Here’s Middleton’s:
| IGE | VUG | PWJ | VBK | EFG | VWO | EEB | BND | ICF | Moeny Market |
| 4.5% | 14% | 14% | 10% | 16% | 4.9% | 6% | 10% | 8.2% | 10% |
Other portfolios
MarketWatch: Inside Morgan Stanley’s model ETF portfolios
BusinessWeek: S&P’s Selection of Solid ETFs
Smartmoney: ETF Education Center Model Portfolios
My final note
I’m sure there are a lot more portfolios to be found over the web at sites like seekingalpha, as well as other locations. I do hope the information I provided here is helpful to you regardless of what you choose to do with it. I would gladly appreciate any comment to let me know what you think. Help support this site by linking to articles such as this.
Cheers!
P.S.
I am definitely not giving investment advice here on this blog. As I’ve mentioned before - my personal investing experience has been less than what I’d hope for (to say the least). Personally - this week was one of the worst. The best I can say is that when you make your own investment decisions, there’s no one to blame but yourself. And I blame my self.
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August 26th, 2008 at 11:12 pm
November 18th, 2008 at 5:16 pm
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