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Allan Roth Second Grader Portfolio: Beating The Hell Outa Wall Street?

The Second Grader portfolio is a great example of simplicity that will beat out Wallstreet in the long run. Do you want to beat up Wallstreet too?

This is the article detailing the investment portfolios of Allan Roth and his Second Grader Portfolios. Here you will find asset allocation and performance for the portfolios.

Allan Roth is the founder of  Wealthlogic and author of How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn. This page details the portfolios that Allan Roth recommends in his book.

Allan Roth Second Grader Portfolio: Beating Wall Street?

Who is Allan Roth and who is the second grader?

Allan Roth has written How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn. He has served as CFO and is offering financial solutions. His portfolio the second grader portfolio is regarded as a lazy portfolio. We consider him as one of the good guys in investing due to his insistence of low fees, fiduciary responsibility and being adamant about keeping investing simple.

The story goes (in the book) that Allan Roth taught his son how to invest in the stock market. He did this when his son was in second grade. His son has subsequently beaten Wall Street by holding this portfolio!

In the book, Allan Roth describes the journey and reasoning for selecting the portfolio. The book is a masterpiece in itself in that it builds an ever-expanding foundation from which you can position your knowledge on investing. It’s like he builds a ladder for you, with each step you get a little smarter on how to invest and what the stock market is.

What is special about the Second Grader Portfolio?

Allan Roth’s Second Grader Portfolio is a close relative to the 3 fund portfolio.

This makes it easy to implement and maintain. Don’t worry though you will still get great returns.

Performance of the Second Grader Portfolios

Portfolio nameAsset class count1 year return (2019)Year to date10 year returnCAGR since 1989DrawdownRisk LevelExpense ratioYield
Allan Roth Second Grader High Risk Portfolio325.81%2.09%10.07%8.67%-34.91%5 - very high risk0.05%2.18%
Allan Roth Second Grader Medium Risk Portfolio320.11%1.86%8.06%8.08%-21.56%3 - medium risk0.05%2.17%
Allan Roth Second Grader Low Portfolio314.41%1.64%5.94%7.19%-8.20%1 - very low risk0.04%2.15%
Allan Roth Second Grader Five-Fund High Risk Portfolio526.11%2.20%9.87%8.83%-34.20%5 - very high risk0.07%2.19%
Allan Roth Second Grader Five-Fund Medium Risk Portfolio420.03%1.83%8.02%8.11%-21.56%3 - medium risk0.05%2.23%
Allan Roth Second Grader Five-Fund Low Risk Portfolio414.37%1.62%5.91%7.19%-8.20%1 - very low risk0.04%2.18%
Allan Roth Second Grader High Risk with CDs Portfolio325.15%1.96%9.75%8.36%-35.21%5 - very high risk0.06%2.11%
Allan Roth Second Grader Medium Risk with CDs Portfolio317.48%1.36%6.78%6.84%-22.77%3 - medium risk0.09%1.87%
Allan Roth Second Grader Low Risk with CDs Portfolio39.81%0.76%3.71%5.02%-10.34%1 - very low risk0.11%1.62%

Asset Allocation of Second Grader Portfolios

Allan Roth Second Grader Five-Fund High-Risk Portfolio                              

  • 54.00%  US Total Stock Market   (VTI)
  • 6.00%    REITs     (VNQ)
  • 27.00%  International All-World ex-US     (VEU)
  • 10.00%  Total US Bond Market    (BND)
  • 3.00%    Precious Metals (GLTR)

Allan Roth Second Grader Five-Fund Low-Risk Portfolio               

  • 18.00%  US Total Stock Market   (VTI)
  • 2.00%    REITs     (VNQ)
  • 10.00%  International All-World ex-US     (VEU)
  • 70.00%  Total US Bond Market    (BND)

Allan Roth Second Grader Five-Fund Medium Risk Portfolio                       

  • 36.00%  US Total Stock Market   (VTI)
  • 4.00%    REITs     (VNQ)
  • 20.00%  International All-World ex-US     (VEU)
  • 40.00%  Total US Bond Market    (BND)

Allan Roth Second Grader High-Risk Portfolio                   

  • 60.00%  US Total Stock Market   (VTI)
  • 30.00%  International All-World ex-US     (VEU)
  • 10.00%  Total US Bond Market    (BND)

Allan Roth Second Grader High Risk with CDs Portfolio                 

  • 60.00%  US Total Stock Market   (VTI)
  • 30.00%  International All-World ex-US     (VEU)
  • 10.00%  Cash (money market fund)          (BIL)

Allan Roth Second Grader Low Portfolio                              

  • 20.00%  US Total Stock Market   (VTI)
  • 10.00%  International All-World ex-US     (VEU)
  • 70.00%  Total US Bond Market    (BND)

Allan Roth Second Grader Low Risk with CDs Portfolio                  

  • 20.00%  US Total Stock Market   (VTI)
  • 10.00%  International All-World ex-US     (VEU)
  • 70.00%  Cash (money market fund)          (BIL)

Allan Roth Second Grader Medium Risk Portfolio                            

  • 40.00%  US Total Stock Market   (VTI)
  • 20.00%  International All-World ex-US     (VEU)
  • 40.00%  Total US Bond Market    (BND)

Allan Roth Second Grader Medium Risk with CDs Portfolio                         

  • 40.00%  US Total Stock Market   (VTI)
  • 20.00%  International All-World ex-US     (VEU)
  • 40.00%  Cash (money market fund)          (BIL)

Alternatives to Second Grader Portfolios

There are a ton of alternatives to the Second Grader Portfolio. The most prominent is the 3 fund portfolio – also a Lazy Portfolios. All of Vanguard’s target-date retirement fund use 3-4 fund (they also have an international bond fund). I also consider Rick Ferri’s portfolios to be in the same league as the Allan Roth’s Second Grader Portfolio.

Conclusion

Which portfolio do you use?

After having read up on Allan Roth’s Second Grader Portfolio I encourage you to find other great portfolios right here on portfolioeinstein.com.

If you have suggestions for new portfolios be sure to add them in comments or reach out to me.

I would love hearing from you!

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