I have a big list of lazy portfolios on my website and people constantly ask me which one is the best portfolio or which is my favorite. In this brief video I’m going to go over one of my favorite lazy portfolios.

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// TIMESTAMPS:

00:00 - Intro
00:13 - What Is the Best Portfolio?
00:45 - My Criteria
01:19 - The Answer
01:44 - Risk Parity Explained
02:19 - Portfolio Discussion
02:55 - Performance and More Discussion

// SUMMARY:

There’s no single objective answer for the “best lazy portfolio.” Is “best” the highest historical return, or the highest risk-adjusted return, or the lowest volatility, or the simplest, or the one that contains every possible investable asset? Each of those criteria would suggest a very different portfolio. While it’s a boring non-answer, I maintain that the best portfolio is the one YOU can stick with for the long term through good times and bad.

Some of my important fundamental boxes to check would be low costs for the exposure we’re getting, diversification in the broadest possible sense across multiple assets, a decent expected return per unit of risk which we call risk adjusted return, and simplicity in the form of a relatively small number of components.

Considering those things, you’re probably thinking of popular names like the Bogleheads 3 Fund Portfolio, Dalio’s All Weather Portfolio, or even my Ginger Ale Portfolio. And while those would certainly fit the bill, none of them is the one I want to talk about here.

One of my favorite lazy portfolios is the Desert Portfolio from the Gyroscopic Investing forum. It looks like this: 30% stocks, 60% intermediate treasury bonds, and 10% gold.

Seasoned investors may recognize these as roughly the risk parity weights for these 3 assets. Risk parity is a weighting scheme in which each asset contributes the same volatility to the portfolio. This is arguably the most agnostic way to weight assets in a portfolio. Risk parity weights are also usually very close to what produced the highest risk-adjusted return historically.

What I love so much about this portfolio is the elegant simplicity in taking 3 uncorrelated, approachable assets and not really inserting opinions about their future expected returns in weighting them. You may recognize this portfolio as essentially being a simpler form of Ray Dalio’s All Weather Portfolio.

We know that most vastly overestimate their tolerance for risk and then panic sell during crashes. Bonds and gold can also outperform stocks for extended periods. I would submit that MOST investors would be much better suited with something more diversified like the Desert Portfolio than with 100% stocks.

#investing #portfolios #bestportfolio

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Disclaimer: This is not financial advice, investing advice, or tax advice. The information presented is for informational, educational, and entertainment purposes only. Investment products discussed are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here: [ Ссылка ]

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