Balanced Portfolios Delivered Better Returns and Lower Risk
10/18/2011 0 comments
John Wasik at Reuters wrote the following article Balancing your portfolio in a bonkers market. He stated:
"Long-term, the middle route makes a huge difference. From 1926 through 2010, according to a recent T. Rowe Price study, a balanced portfolio delivered returns above 10 percent almost as frequently as an all-stock portfolio — with 40 percent less volatility."
"You could also build a balanced portfolio on your own by buying the two SPDR funds I mentioned above. Buy them through a deep-discount broker or find their equivalents commission-free through Fidelity Investments, Charles Schwab or the Vanguard Group.
Want to take the balanced approach one-step further? Consider an ultra-balanced approach with at least 12 separate funds representing seven asset classes, such as the ones found in the 7-12 portfolio. Over the past five years, the passive version of 7-12 has returned 4.8 percent, compared with 3.87 percent for the Vanguard Balanced Index and 0.71 for the Vanguard 500 Index fund, according to Israelsen, who designed the portfolio."
Read the complete article here >>
Meanwhile, MyPlanIQ maintains a list of lazy portfolios on Lazy Portfolios. You can find that on ETFs or Mutual Fund Portfolios.
Also, check out Israelsen's 7Twelve lazy portfolio/plan.
To compare S&P 500 (Vanguard 500 Index Fund VFINX) performance with Vanguard Balanced Index Fund (standard 60% US stocks, 40% bonds balanced funds VBINX), click here.
You can also find a quote and its total return performance in a given period by going to a quote page such as VFINX and click on 'Total Returns and Statistics' tab.
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