Rick Ferri Core Four: A Solid Lazy Portfolio for Retirement Investors Investing for retirement can feel like a maze sometimes. You wonder, what’s the simplest way to build a portfolio that works for the long haul? Well, the Rick Ferri Core Four portfolio might just be one of those answers. It’s straightforward, it’s diversified, and it’s built for people who don’t want to spend their days glued to stock charts. Let’s take a look at what this portfolio is, why it makes sense for retirement accounts like 401(k)s or IRAs, and how it holds up for taxable accounts too. Rick Ferri, the guy behind this portfolio, is a name you might have come across if you’ve poked around in the world of low-cost investing. He’s a former Marine, a CFA, and someone who’s been preaching the gospel of index funds for years. His philosophy? Keep it simple, keep costs low, and let the market do its thing over time. The Core Four portfolio is his way of saying, you don’t need a hundred funds to build wealth. Four will do just fine. Is it popular? Hard to say exactly, but you see it mentioned often enough in forums like Bogleheads, where folks who love simple investing hang out. Rick Ferri Core Four Holdings Here’s what the Core Four portfolio looks like:

• VTSMX (US Stocks): 30.0%
• VGTSX (International Stocks): 24.0%
• VGSIX (REITs): 6.0%
• VBMFX (Bonds): 40.0%

This mix covers a lot of ground. You’ve got US stocks, international stocks, real estate through REITs, and bonds. It’s like a balanced meal, you know? Each part serves a purpose. The US stocks (VTSMX) give you exposure to the broad American market, everything from Apple to small-cap companies nobody’s heard of. International stocks (VGTSX) add some global flavor, which is nice because the US doesn’t always lead the pack. REITs (VGSIX) are there for real estate, which can zig when stocks zag. And bonds (VBMFX)? They’re the anchor, keeping things steady when markets get choppy. But does it cover everything? Well, it hits the major assets: US stocks, international stocks, bonds. REITs are a bonus, adding a bit of diversification since real estate doesn’t always move in lockstep with stocks. What’s missing? No emerging market stocks, no small-cap stocks as a standalone, no commodities or gold. If you’re thinking about inflation hedges like gold, you might look at something like the Harry Browne Permanent Portfolio. That one includes gold to protect against inflation, which can eat away at returns over time. The Core Four skips that, which might be a drawback if you’re worried about rising prices. On the other hand, it keeps things simpler. Risk-wise, this portfolio is moderate. The 40% in bonds gives it some cushion, but with 60% in stocks and REITs, it’s not exactly a sleepy conservative portfolio either. It’s suited for someone who’s okay with some ups and downs but doesn’t want to ride the full rollercoaster of an all-stock portfolio. If you’re younger, maybe in your 30s or 40s, this could work well for a 401(k) or IRA. If you’re closer to retirement, you might want to tilt it safer, maybe bump up the bonds. How do you know what’s right? A tool like MyPlanIQ’s Asset Allocation Calculator can help you figure out your risk tolerance. Answer a few questions, and it’ll tell you how much to put in stocks versus bonds. Using the Core Four in a 401(k) or IRA So, how do you actually use this portfolio in a 401(k) or IRA? First, check what funds your 401(k) offers. Most plans have something close to VTSMX, like an S&P 500 index fund or a total stock market fund. For international stocks, look for a broad international index fund. REITs might be trickier—some 401(k)s don’t offer them. If that’s the case, you could map REITs to US stocks, since they’re somewhat correlated. For bonds, find a total bond market fund or a core bond fund. If your 401(k) doesn’t have index funds, look for diversified active funds with low expense ratios. You can check diversification and fees on a site like Morningstar.com. The rule of thumb? Stick to index funds for stocks, and for bonds, go for core bond funds or high-quality actively managed ones (see fixed income investments for more). In an IRA, it’s easier. You can usually buy the exact ETFs or mutual funds, like Vanguard’s VTI (for VTSMX) or BND (for VBMFX). If you want to tweak the portfolio for risk, it’s simple. Say you’re more cautious, you might go 50% bonds, 25% US stocks, 20% international stocks, 5% REITs. More aggressive? Maybe 40% US stocks, 30% international, 10% REITs, 20% bonds. The key is to match your risk tolerance, which you can gauge with that calculator we mentioned. One thing stands out about the Core Four: it’s simple but not simplistic. Four funds, and you’re covering most of the bases. That 6% in REITs is a nice touch, giving you a slice of real estate without needing to buy properties. But the lack of emerging markets or commodities? It’s a trade-off. You’re betting on the big, broad markets to carry you through. Historically, that’s worked out, but no portfolio is bulletproof. Core Four in Taxable Accounts Now, what about taxable brokerage accounts? The Core Four shines here because it’s built on index funds, which are tax-efficient. Index funds like VTSMX or VGTSX don’t trade stocks often, so they generate fewer capital gains. ETFs like VTI or VXUS are even better for taxable accounts since they’re structured to minimize taxes. The buy-and-hold nature of this portfolio also helps. You’re not flipping funds every year, so you’re not triggering taxes constantly. Could you do tax-loss harvesting? Sure. If one fund dips, you could sell it, book the loss for tax purposes, and buy a similar fund (like swapping VTI for SCHB). Just be careful about wash-sale rules. But honestly, the Core Four is already tax-friendly because it’s so hands-off. One catch with taxable accounts is the REITs. VGSIX generates dividends that aren’t always tax-advantaged, so you might take a small tax hit there. If that bothers you, you could skip REITs in a taxable account and stick with the other three funds. But for most people, that 6% allocation won’t move the needle much tax-wise. Final Thoughts The Rick Ferri Core Four is one of those portfolios that feels like a warm blanket. It’s not flashy, it’s not trying to beat the market, but it gets the job done. For 401(k) or IRA investors, it’s a solid starting point, especially if you’re new to investing or just want something you can set and forget. In taxable accounts, it’s efficient, though you might tweak it slightly for taxes. Is it perfect? No portfolio is. If inflation spikes or emerging markets take off, you might wish you had a bit more exposure. But then again, chasing every possibility is how you end up with a portfolio that’s too complicated to manage. Maybe you’re wondering, will this portfolio hold up for the next 20 years? Nobody knows for sure. Markets are funny like that. But looking back, simple, diversified portfolios like this one have done pretty well over long periods. They’re like the tortoise in the race, slow and steady. And in investing, that’s often enough. What do you think, is simple better for you? Or are you tempted to add a little spice to the mix?

Background Information on the Author and Philosophy The William Bernstein “Smart Money” Lazy Portfolio is a one of Bernstein’s lazy portfolios that people constructed based on his writings. The “Smart Money” is also pretty balanced in terms of its allocations to US stocks, internaitonal stocks, emerging market stocks and bonds. It’s a 60% stocks 40% bonds portfolio. Asset Allocation and Holdings Analysis Asset Allocation Breakdown: Diversification: This portfolio achieves excellent diversification across asset classes, geographies, and investment styles: Pros and Cons: 3. Application for Retirement Investors (401(k) and IRA) The following shows how to apply the William Bernstein Smart Money lazy portfolio to retirement accounts, For 401(k) Accounts: Many employer-sponsored 401(k) plans offer a selection of mutual funds or target-date funds, but they may not include all the exact funds listed in the Smart Money Lazy Portfolio. Here’s how an investor can approximate the holdings: For IRAs: IRAs typically offer greater flexibility, allowing direct purchase of Vanguard funds or equivalent ETFs. An investor could replicate the portfolio exactly using the specified funds or their ETF equivalents (e.g., VTI for VTSMX). Online brokerage platforms like Fidelity, Schwab, or Vanguard make it straightforward to implement this strategy. Summary The Bernstein Smart Money Lazy Portfolio works best for people who want something steady and hands-off. It’s simple four fund portfolio is good enough for most average investors. Make sure to scale up or down of your stock exposure based on your age, your return expectation and your financial situation.

  As people move into their 50s, retirement planning tends to shift from something abstract into something that actually matters — you start to feel the weight of the timeline. The “plenty of time” mindset starts to fade. You’re no longer just accumulating. You’re thinking, maybe quietly at first, about how to protect what you’ve built. And how to make it last. Burton Malkiel — who wrote A Random Walk Down Wall Street, a popular investing book — has a version of the lazy portfolio meant for people right in this stage of life. Late 40s, mid-50s. Somewhere in that zone where the clock starts ticking a little louder. His take on the lazy portfolio keeps the familiar rhythm — diversified, low-cost, no unnecessary trading — but with a tilt that reflects the needs of this age group. That means not just U.S. equities but international and emerging markets too. It’s not just a growth bet — it’s partly a hedge. And on the bond side, you see some interesting choices: long-term corporates, inflation-protected securities. These are moves meant to defend against erosion. Not flashy, but sensible. Asset Allocation: Bond Allocation: Other: This lazy portfolio for mid-fifties investors is designed to provide a balanced mix of assets, including domestic and international stocks, real estate, and various types of bonds. The strategy aims for long-term growth while managing risk through diversification and periodic rebalancing. This portfolio is annually rebalanced. 

Doug Ramsey All Asset No Authority (AANA) Lazy Portfolio: A Simple Choice for 401(k) and Novice Investors Investing can feel like a maze, can’t it? You look at all the choices, the funds, the market noise, and you wonder what’s actually worth your time. The Doug Ramsey All Asset No Authority (AANA) Lazy Portfolio is one of those ideas that sounds almost too simple to work. Yet, it’s been around, quietly doing its job for those who don’t want to micromanage their money. Let’s talk about this portfolio, its holdings, and how it fits into something like a 401(k), an IRA, or even a taxable brokerage account. Maybe it’s not perfect, but maybe it’s enough? Doug Ramsey, the mind behind this portfolio, isn’t some Wall Street guru shouting predictions. He’s more of a thinker, someone who’s watched markets cycle through booms and busts. From what’s out there, Ramsey’s philosophy leans on diversification and simplicity. No chasing hot stocks, no timing the market. Just a mix of assets that, together, aim to weather whatever the economy throws at you. The AANA portfolio reflects that: spread your bets, keep it low-maintenance, and let time do the heavy lifting. It’s not flashy, and neither is Ramsey. That’s probably why it resonates with people who just want a plan they can stick to. Doug Ramsey is the Chief Investment Officer at Leuthold Group, known for his rigorous research and data-driven investment insights. Doug Ramsey regularly revisits his “All Asset No Authority” (AANA) portfolio as part of Leuthold Group’s annual asset allocation review.  Why “No Authority”? The portfolio’s name, “All Asset No Authority,” humorously reflects its hands-off, no-expert-required approach. The term “No Authority” suggests that the portfolio is designed to be simple and accessible, requiring no specialized knowledge to manage. Its equal allocation across the seven assets reinforces this by ensuring that no single asset class is given more emphasis than others, maintaining a balanced and straightforward structure. Ramsey designed it with simplicity in mind, making it accessible for individual investors who prefer an evenly distributed asset allocation strategy without actively managed oversight. Doug Ramsey All Asset No Authority (AANA) Lazy Portfolio Holdings Here’s what the portfolio looks like, broken down by its pieces: Asset Class Allocation (Approx. 14.3% each) U.S. Large-Cap Stocks 14.3% U.S. Small-Cap Stocks 14.3% U.S. Real Estate (REITs) 14.3% International Developed Stocks 14.3% Emerging Markets Stocks 14.3% U.S. Long-Term Treasury Bonds 14.3% U.S. TIPS (Treasury Inflation-Protected Securities) 14.3% This is a portfolio that doesn’t put all its eggs in one basket. You’ve got US stocks, both large and small, international stocks, real estate through REITs, long-term Treasuries, commodities, and even gold. It’s like a buffet of assets, each serving a purpose. The question is, does it cover enough ground? Well, it hits the major bases: US stocks, international stocks, and bonds. That’s a good start. Then it goes further, adding small caps, REITs, commodities, and gold. No emerging markets, though. That’s a gap, maybe, if you think those markets are worth the extra risk. Let’s talk about gold and long-term Treasuries, because they stand out. Gold, as folks like Harry Browne pointed out in his Permanent Portfolio, is a hedge against inflation. When prices rise, when currencies wobble, gold tends to hold its ground. It’s not perfect, but it’s something. Long-term Treasuries, like VUSTX, also play a role in Browne’s thinking. They’re a buffer during deflation or market crashes. When stocks tank, long-term bonds often rally as investors flock to safety. This mix gives the portfolio a kind of balance, a way to zig when the market zags. But equal weighting across seven assets? That’s bold. It’s saying no single asset class is the star. Some might call it overly cautious, others might say it’s brilliantly simple. The pros? Diversification is the big one. You’re not betting the farm on tech stocks or hoping bonds never falter. If one piece struggles, others might pick up the slack. The risk level feels moderate, not too aggressive but not sleepy either. Small caps and commodities add some spice, while Treasuries and gold keep things grounded. The cons? Well, it’s not optimized for growth. If the S&P 500 goes on a tear, this portfolio might lag. Gold and commodities can sit dormant for years. And managing seven funds might feel like a chore for someone who wants a true “set it and forget it” plan. Using the AANA Portfolio in 401(k) and IRA Accounts So, how do you make this work in a 401(k) or IRA? First, check your plan’s fund lineup. Look for index funds that match these asset classes. For VTSAX, you want a total US stock market fund. For NAESX, a small-cap index. VGTSX needs an international developed market fund. And so on. If your 401(k) doesn’t have exact matches, don’t panic. Find diversified active funds instead. Check their expense ratios and diversification on something like Morningstar.com. Rule of thumb: for stocks, prioritize low-cost index funds. For bonds, go for core bond funds or high-quality actively managed ones, like those discussed at MyPlanIQ. What if your 401(k) is missing something, like commodities or REITs? Map them to US stocks. It’s not ideal, but it keeps things simple. Same for long-term bonds—intermediate bond funds can work if that’s all you’ve got. In an IRA, you’ve got more freedom. ETFs like GLD or DBC are easy to grab at a brokerage. Just stick to the same allocation: 14.3% each, or as close as you can get. This portfolio suits folks who want balance without too much fuss. It’s not for the aggressive types chasing 15% annual returns. It’s better for someone with a 10- to 20-year horizon, maybe a bit risk-averse but still wanting growth. To scale it, figure out your risk tolerance first. Use a tool like MyPlanIQ’s Asset Allocation Calculator. Answer a few questions, and it’ll tell you how much to put in stocks versus bonds. If you’re conservative, lean heavier on VUSTX. If you’re bolder, bump up the stock and commodity portions. Just don’t stray too far from the equal-weight spirit. Using the AANA Portfolio in Taxable Accounts Taxable accounts are trickier, but this portfolio plays nice. Most of its funds, like VTSAX or VGTSX, are index funds, which are tax-efficient. They don’t churn holdings, so you’re not hit with constant capital gains taxes. ETFs, like GLD, are even better for this. The buy-and-hold nature of the AANA portfolio helps too. You’re not trading in and out, so you defer taxes until you sell. If you want to get fancy, consider tax-loss harvesting. If DBC dips, sell it, grab a similar commodity ETF, and book the loss for tax purposes. Just don’t overcomplicate it—simplicity is the point. Final Thoughts The Doug Ramsey AANA Lazy Portfolio isn’t going to make headlines. It’s not trying to. It’s for people who’ve seen a market cycle or two, who know that chasing trends often ends in tears. Is it perfect? Probably not. The equal weighting might feel arbitrary to some, and the lack of emerging markets might bug others. But it’s diversified, it’s thoughtful, and it’s built to last. Whether you’re stuffing it in a 401(k), an IRA, or a taxable account, it’s a plan you can set and mostly forget. And isn’t that what most of us want, deep down? A strategy that works without needing to watch the market every day?

1. Background and Philosophy The Second Grader’s Starter Portfolio was created by Paul B. Farrell, a former investment columnist for MarketWatch and author of multiple books on lazy investing. Farrell advocated for simple, low-cost, and hands-off strategies that even a second grader could understand. His philosophy emphasized broad diversification, minimal maintenance, and long-term growth through index funds. This portfolio is designed to be a foundational strategy for beginners or those who prefer a passive approach. 2. Asset Allocation Analysis The portfolio consists of three ETFs: Key Aspects: 3. Practical Application in Retirement Accounts For 401(k) Accounts: Investors can replicate this portfolio by identifying equivalent funds in their 401(k) plan: If exact matches aren’t available: For IRA Accounts: Investors can directly purchase the ETFs (VTI, VEU, BND) or their mutual fund equivalents. IRAs offer more flexibility, allowing for precise allocation. Note: Since commodities are rarely available in 401(k)s, investors can allocate that portion to stocks or omit it entirely.