The term “lazy portfolio” refers to a portfolio designed to perform well in most market conditions, that can be held for an extended period without changing the asset allocation leading up to retirement. Popular examples are the traditional 60/40 Portfolio and the Bogleheads 3 Fund Portfolio.
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Lazy portfolios are usually simple, diversified collections of low-cost index funds; no active management, market timing, or stock picking here. Jack Bogle, founder of Vanguard and considered the father of index investing, advocated for the “majesty of simplicity.” In this case, “lazy” isn’t a bad thing.
Lazy portfolios arguably take index investing even further, taking the guesswork and complexity out of investing, allowing the investor to truly be “lazy” in their investing approach by eliminating the need to choose funds and the allocations thereof; the investor need only occasionally rebalance their lazy portfolio. This saves the investor time and alleviates potential stress and cognitive dissonance related to investing strategies. As such, they’re perfect for the long-term buy-and-hold investor who wants to be hands-off.
Below is an ever-evolving list of popular lazy portfolios, with links to my usually-brief analysis/review of each. On each respective page is a link to a pie of ETFs for use with M1 Finance. Whenever possible, I’m usually using low-cost Vanguard funds, or whichever provider has the lowest fees with sufficient AUM. Similarly, when a particular risk factor is targeted, I’ve selected the fund with a favorable balance of factor loading, fees, and volume. I try to review and update these regularly as new funds emerge that may be a superior choice.
A lot of people email me asking which is the best lazy portfolio. That’s subjective and highly personal; there’s no single correct answer. “Best” for one person could mean greatest expected return. “Best” for someone else may mean the lowest volatility. More advanced investors may prefer a lazy portfolio that heavily utilizes factor tilts; others prefer simplicity. Start by assessing your personal goals, risk tolerance, and time horizon, and choose an appropriate asset allocation. The “best lazy portfolio” is the one that allows you to sleep easy at night, ignore the short-term noise, avoid tinkering, and stay the course.
In most cases of US-only equities, I’ve also created a global version to capture international stocks for those understandably wanting more diversification.
Comment or email to request a lazy portfolio that I may have missed or haven’t seen yet. List of lazy portfolios below is in no particular order.
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List of Lazy Portfolios
- Ginger Ale Portfolio (my own portfolio)
- Vigorous Value Portfolio (my design)
- Neapolitan Portfolio (my design)
- Factor Tank Portfolio (my design)
- Sample Retirement Portfolio (my design)
- Tom’s Tail Risk Portfolio (my design)
- Ray Dalio All Weather Portfolio
- Golden Butterfly Portfolio
- Harry Browne’s Permanent Portfolio
- Bogleheads 3 Fund Portfolio (global stocks, U.S. bonds)
- Bogleheads 4 Fund Portfolio (global stocks, global bonds)
- Warren Buffett ETF Portfolio (90/10)
- Paul Merriman Ultimate Buy and Hold Portfolio
- Paul Merriman 4 Fund Portfolio
- Ben Felix Model Portfolio
- 60/40 Portfolio
- Hedgefundie’s Excellent Adventure (not “lazy,” I know; not for beginners)
- Custom Emergency Fund Replacement (low risk)
- David Swensen Portfolio (Yale Model)
- Meb Faber Ivy Portfolio
- Bernstein No Brainer Portfolio
- Bernstein Coward’s Portfolio
- Frank Armstrong Ideal Index Portfolio
- Bob Clyatt Sandwich Portfolio
- Pinwheel Portfolio
- Bill Schultheis Coffeehouse Portfolio
- John’s High Dividend Pie (for dividend income investors)
- Second Grader’s Starter Portfolio
- Larry Swedroe Portfolio (30/70, small cap value)
- Tim Maurer Simple Money Portfolio
- Rick Ferri Core 4 Portfolio
- JL Collins Simple Path to Wealth Portfolio
- Rob Arnott Portfolio
- Research Affiliates Model Portfolios
- Craig Israelsen 7Twelve Portfolio
- Roger Gibson 5 Asset Portfolio
- Roger Gibson Talmud Portfolio
- Gyroscopic Investing Desert Portfolio
- Scott Burns Couch Potato Portfolio (50/50)
- Scott Burns Margarita Portfolio
- Alexander Green’s Gone Fishin’ Portfolio
- NTSX with Diversification
- PSLDX Replication
- RPAR Replication
- SWAN + Gold
- Improved M1 Finance Ultra Aggressive Portfolio Expert Pie (100/0)
- Improved M1 Finance Aggressive Portfolio Expert Pie (90/10)
- Improved M1 Finance Moderately Aggressive Portfolio Expert Pie (80/20)
- Improved M1 Finance Moderate Portfolio Expert Pie (70/30)
- Improved M1 Finance Moderately Conservative Portfolio Expert Pie (60/40)
- Improved M1 Finance Conservative Portfolio Expert Pie (40/60)
- Improved M1 Finance Ultra Conservative Portfolio Expert Pie (20/80)
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.
Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.
John,
Over the pandemic, we decided take our stimulus money and open Roth IRAs for our 30 something kids.
What portfolio would you recommend putting that money into? I don’t mind looking at allocations annually or so, just not often.
Thanks
Hey Dan, I can’t provide personalized advice but I usually say the Bogleheads 3-Fund is a good place to start for most folks.
I’d be curious to hear your thoughts about the Ted Aronson Family Taxable Portfolio, specifically how he splits VEA into separate Europe and Pacific ETFs. I know you like to go granular 😉 Thanks!
Jon, I remember encountering that one a while back when I was making my list of lazy portfolios and I know I even put it on there and then there was a reason I didn’t do it but I’ve forgotten what that reason was. I’ll circle back!
Nice articles! Now I have tons of stuff to read. How about a review of MUSCULAR PORTFOLIOS? A semi lazy portfolio strategy. Thanks
Hi John
Love the site — just what I was looking for. Quick question is do any of these portfolios seek to minimize dividends to avoid paying taxes if held in a taxable account? For example using ETFs which automatically reinvest distributions rather than paying them out.
Cheers
Not specifically, no. A lazy portfolio by definition would probably be diversified across Value and Growth stocks. Reinvested distributions with ETFs would still be taxed.
Hi John,
Great article. I really appreciate the perspective on bonds and commodities. I haven’t seen comments on REITs. I notice they are not in your portfolio. Maybe there is a section you comment on them that you could direct me to or perhaps your viewpoint is somewhere else. Any info much appreciated.
Thanks, Edward. I touched on REITs here.
H John, wow this site has been amazing resource after my exposure to and learning of the Rational Reminder portfolio. Thank you for sharing your knowledge, clearly you have put in an immense amount of time and effort.
I am wondering if you have considered classifying any of the more robust portfolios into recommended risk tolerance/time horizon buckets, as well as tax efficiency. For example, I am in my mid twenties with a high risk tolerance, and it isn’t always clear if a certain portfolio is best for someone with a long time horizon versus another. Additionally, it would be useful to see how a portfolio/fund performs from a tax perspective.
Thanks, Chris. I may entertain that idea in the future but I’m hesitant to “recommend” anything and encourage people to choose their own journey.
What’s your favorite portfolio for someone in their 20s?
Hard to say. But my favorite should be irrelevant to one’s choice anyway.
I’ll ask that question slightly differently..
for someone young with a higher risk tolerance and in their accumulation phase, what are three portfolios you’d recommend considering?
Love your content! Thanks.
Glad you’ve found the content useful. I can’t provide personalized advice, but then at that point it also comes down to tracking error regret and the investor’s knowledge of things like factors, their desire for simplicity, etc. That’s why it’s impossible to make any kind of blanket “recommendation.” That said, can’t really go wrong with something like the classic Bogleheads 3 Fund. And then you’ve got varying degrees of factor tilts with a few of my designs, the PWL model portfolio (Ben Felix), and Merriman. I’m also partial to single fund solutions like NTSX and PSLDX.
Hey man, I’ve been reading your guides and I really like some of the funds you’ve suggested. Especially NTSX, and the idea of overweighting small cap value. I’ve been trying to combine your ideas with the David Swenson theory that asset allocation decides return rather than security selection and market timing… although I disagree with his giant real estate allocation since the majority of our net worth (like most people), is in our house already. So I’ve avoided overweighting any real estate. Could you evaluate this? What are your thoughts on this portfolio, perhaps specifically in regards to commodities, which I think a dash of are beneficial..
Here’s the pie;
https://ibb.co/tcdHHrS
https://ibb.co/tcdHHrS
Thanks, Mark! I can’t provide personalized advice but I’ve noted a few times in some posts that I’m not a big fan of broad commodities. I’d be more likely to just use gold, and I’m not a big fan of that either. That BTC in there is contributing a lot more volatility than you might think; its risk parity weighting alongside stocks and intermediate treasuries is a tiny 3%. Can’t say that portfolio isn’t broadly diversified though.
Hello, John – This is a great site; thanks very much for all your work collecting these models. I’m wondering if you have published a table of comparative statistics on these different portfolios, that would make it easier to narrow down the search without backtesting each on individually. (perhaps you’ve posted it somewhere and I just haven’t found it…) For example
– CAGR
= Std Dev
– Sharp
– drawdown during 2008-9 and March-April 2020 – how deep, and how long to recover?
– deepest drawdown overall, and % of total time that drawdown exceeds 10%
– correlation (r2) with SPX
That way it would be easier to narrow down the search based on each individual tradeoff of risk and return.
Thank you.
I haven’t. That’d probably be pretty hard to do with my current resources. Maybe one day.
Hi David,
I think that the methodology of individual securities within each portfolio and the overall methodology of the portfolios themselves are the most important in finding the best portfolio specifically for you
You site is the clearest on investing I have ever read. Remarkable job. I am interested in the Ginger Ale portfolio, but am having difficulty backtesting. Could you share what you used in backtesting with portfolio visualizer?
Thanks for the kind words! Used comparable mutual funds from Dimensional here to get a rough idea of how those Avantis funds might have behaved.
You might enjoy the rational reminder forum. It’s factor-head central.
community.rationalreminder.ca
I think you’d fit in nicely
I get in there occasionally.
Just discovered your website and found it very helpful. I am retired and have RMD requirements from my wife and my IRA’s. What portfolio do you recommend? Is your Ginger Ale portfolio good in that situation? I see you recommended the All Weather Portfolio to someone who is retired. Was that over your own Giner Ale portolio in retirement?
Philip, glad you’ve found the site helpful! I can’t provide personalized advice, but as always, it depends on your personal time horizon and risk tolerance. At retirement, I personally would be inclined to significantly reduce volatility and risk since I’d be withdrawing from the portfolio every year for expenses. This would be something similar to the All Weather Portfolio, yes. I will likely just use my Ginger Ale and ratchet up the bonds to something around 60/40. My post on asset allocation may offer some help. Consider paying a professional for a single session for an hour or 2 if you feel stuck.
John, I tried your Modified Gone Fishing (Alexander Green’s) portfolio allocation in Portfolio Visualizer and didn’t even come close to your data points you posted. In fact, the original allocation of Green’s portfolio beat your modified version by 0.29%. Plus your modified version was avg. 9.2% (dividend reinvested) vs SPY 16.95% measured from 2011 to 2021. What am I doing wrong here? Please shed some light. Thank you!
Use mutual fund equivalents to extend backtests, e.g. VUSTX instead of VGLT, VFINX instead of SPY, etc.
John, just out of curiosity, have you compared these lazy portfolios to each other, to arrive at best performance? Of course we all want to know, which “lazy” portfolio is most performant? Does your personal one get better total returns than other strategies provided by other investor types.?
Hey Craig, I’ve compared historical performance for some of them on their respective pages, like the Golden Butterfly, All Weather, etc. But as we know anyway, decisions on what to invest in shouldn’t be based on past performance. Moreover, it’s impossible to say which is “best” from a pure returns perspective since we can’t know which will perform best in the future. They differ largely based on risk tolerance, which is highly personal. Investors should be using personal risk tolerance, time horizon, and subsequent asset allocation (and desire for or indifference toward simplicity) to choose what to invest in, not historical returns.
All that being said, mine most closely aligns with those from Ben Felix, Paul Merriman, and Larry Swedroe, drawing on the best (i.e. most robust), newest research related to asset pricing and expected returns, while conforming to my own personal risk tolerance and time horizon.
Hi John,
just a quick table comparing all strategies would be a gift from heaven.
Thank you!
Kris
I second this!
Maybe some day.
Hi John,
as you know, european users don’t have direct access to the ETF’s mentioned. Several times you mention as a solution to look at etoro. Now it seems they are changing their regulations (US ETF’s are being sold as CFD’s):
“From time to time as a global business, it is necessary to modify or restrict the services we offer in certain countries. From 18 April 2021, it will no longer be possible for eToro users residing in Belgium to open new CFD positions or to start copying anyone who resides outside Belgium. CopyPortfolios which include CFDs will also not be available. ”
Wisdomtree does have a good offer of EU available products and about 90% of the ones you mention can be found here. Of course they don’t have the same volume and some funds are really small. Personally, I didn’t care too much as for an ETF the volume should not affect the price. However, I see you take the AUM in calculation for your selection.
Here is the list with ETP’s. Maybe it can help someone. I also wonder about your opinion about their offer:
https://www.wisdomtree.eu/nl-be/-/media/eu-media-files/other-documents/product-list/etf-product-list.pdf
Cheers
If you were to build a lazy portfolio with an initial amount that you don’t plan to replenish much over time (10-15 years), how would you invest the initial amount? wait for a large correction and invest all in once? wait for individual dips and invest within 1 year 3 to 4 times?
Except for some commodities, stocks are at an all-time high and without being able to use dollar-cost averaging over a long period of time, I fear a large correction within the first year or two would reduce my returns prospects over the long-term goals.
I’d put it all in the market ASAP, which is what I do at the beginning of each year to max out my IRA and HSA. Lump sum beats DCA on average. A small handful of days are responsible for most of the market’s gains for the entire year. Don’t miss out on those by waiting around for a correction that may never come. This is why holding dry powder is not a good idea. Time in the market beats timing the market.
The longer you extend the DCA period, the worse the results are. If I were to do it, I wouldn’t DCA over a period longer than 3 months.
I commented a little bit ago about doing an analysis on the Marotta’s Gone-Fishing Portfolio. I thought of a couple of other lazy portfolios if you wanted a comprehensive list. Dave Ramsey’s portfolio of 25% Growth and Income 25% Growth 25% Aggressive Growth 25% International and the wealthfront/betterment portfolio https://www.forbes.com/sites/marcgerstein/2016/01/16/evaluating-the-wealthfront-and-betterment-portfolios/?sh=1e5803321f34
Thanks for the suggestions, Matt! Will try to get on these soon.
Matt, just finished the Gone Fishin’ Portfolio. It was both fun and frustrating.
Hello John. I’ve been just found your site and love it.
Is there a way to compare all these with S&P500? Or make a comparison between them? For example, to make it easier, Bogleheads 2 vs 3 fund? Maybe one of them vs All Weather? All Weather vs Buffet’s? Or most important, “my fund” vs any of these?
Thanks Daniel! Glad you’re liking it. I usually compare each one to the S&P 500 in each individual post. No way to do them all at once that I can think of. You can do 3 at a time plus the S&P 500 in Portfolio Visualizer. Other tools may allow you to compare more simultaneously; I’m not sure.
But yes you can take any portfolios/funds and put them in Portfolio Visualizer to view the historical data.
A lazy portfolio that I’d be interested in seeing is Marotta’s Gone-Fishing Portfolio (https://www.marottaonmoney.com/category/gone-fishing/) if you have the chance.
I just started reading some of your analyses and I love the attention to detail and seeing a third party put some of these guys’ “secret sauce” portfolios through their paces.
Thanks Matt. I remember glancing at this one a while back and I think I couldn’t find a definitive asset allocation that spelled it out. I believe I found multiple different ones claiming to be the “Gone Fishing Portfolio.” I’ll revisit it and let you know.
Hello and thank you so much for your work ! I need to ask, what would be your recomendation for a young man (25 years old) who want to invest his money on a lazy etf portfolio for about 40 years? Thank you so much
Hey Juan, I can’t make personalized recommendations but the most popular lazy portfolio is the Bogleheads 3 Fund. Your choice will depend on your personal risk tolerance. Others like the All Weather Portfolio and the Golden Butterfly Portfolio use more diversification to lower volatility and risk. The Paul Merriman Ultimate Buy and Hold and the Ben Felix Factor Portfolio are some of my favorites that pretty closely resemble my own portfolio.
Hey, thank you for your very good job, I’d like to know how do you simulate a leveraged etf with portfoliovisualizer, have you an article wich talks about that ? Send me it please.
Hi, for some of them I created my own simulation data. For a quick and dirty way to do it, you can set a position at the leveraged percentage and use a negative cash position with CASHX.
What is the process to generate one’s own simulation data? Is there any resources you could link to for learning that?
Thanks in advance!
Basically, locate a mutual fund equivalent and download the historical returns from Yahoo Finance and then upload that to Portfolio Visualizer.
Hi John! I am really enjoying your blog so far. I started getting into M1 investing and was wondering what advice you would have for someone in their mid 30’s? I like the idea of a lazy pie that I do not need to maintain or switch up but I can afford to be a little risky. If you have a specific blog post you can direct me to I would really appreciate it. Thanks!
Hey Barb. Glad you’re enjoying it!
That’s a simple question with a not so simple answer. I don’t really have a post where I’ve compared a lot of these at once. I did write a comment here that may give you some insight where someone asked which lazy portfolios were my favorites.
Since you mentioned being able to afford some risk, I’d probably go with an 80/20 asset allocation of stocks to bonds. You might like the long-term treasury version of the Bogleheads 3-Fund Portfolio or my modified 80/20 version of the Paul Merriman Ultimate Buy & Hold Portfolio. Both of those versions appear at the very end of the blog posts.
Hope this helps!
Which portfolio(s) would you recommend at various points throughout an investor’s life? The common thought is being heavy stocks when young, and rebalancing toward bonds as one ages. What about taking the same approach to portfolio? Maybe start Butterfly and slowly drift toward All Weather when one gets into their 50’s or 60’s?
Hey Rob,
Thanks for your comment. The entire purpose of “lazy portfolios” is to not have to adjust them over your investing horizon. The Golden Butterfly and All Weather are very similar. If you want to gradually move more into bonds as time goes by (I support that idea) then I’d go with the Bogleheads 3 Fund or Bogleheads 4 Fund and adjust the allocations accordingly.
Is there one place where all these portfolios are compared? I’m retired and have a low risk tolerance but also want to choose the best one for safety and returns. Do you have any favorites?
Hey Tom,
No I haven’t compared them all anywhere here. You can see their historical returns at lazyportfolioetf.com.
It’s hard to pick a favorite as they’re appropriate for different time horizons in some cases. In your case I’d probably choose the All Weather Portfolio.