Here is How Portfolio Einstein Will Help You Invest Better

How portfolioeinstein helps you invest better

Which investment will give me the best bang for my buck?

That is the question we will help you with.

There are tons of portfolios everywhere. They are in magazines, they are found on the web made by financial experts, you can find them in books, they are paraded by wealth advisories, one-stop ETFs and funds are based on asset allocation. You probably got an asset allocation as well.

But which one is best? What you need is a way to clue you in what kind of investment returns and risks you can expect from a model investment portfolio.

Then you need options.

We have 100’s of portfolios on site ready to be implemented for every conceivable investing scenario.

  • They are all benchmarked with data going back to 1989. It includes CAGR, drawdown, Sharpe ratio, and standard deviation. We just added expense ratio and expected dividend yield for all portfolios.
  • They can be compared.
  • They are documented. They have asset allocation.
  • There’s no mumbo-jumbo (well at least less mumbo-jumbo)

Investing situations that you need help with

Some common investing scenarios those below. They all require investing decisions. Decisions that above all else requires you to have an asset allocation. This is important!

They ALL have an asset allocation within them. The question is will you construct it yourself or leave it to fate (or others)?

For retirement

  • 401(k)
  • Solo 401(k)
  • 403(b)
  • 457(b)
  • IRA
  • Roth IRA
  • Self-directed IRA
  • 529 plan

For college savings

  • 529 plan
  • Custodial Account
  • Traditional savings account

For individual investors

  • Saving for a rainy day portfolio
  • Goal-based investing, new car, wedding, new phone in 5 years.
  • Grow your wealth
  • For business owners wanting to invest surplus capital in non-correlated asset classes.

For family-offices, institutional investing or legacy endowment funds

  • Secure higher returns with fewer expenses
  • Achieve lower complexity with fewer asset classes
  • Secure income in perpetuity

What we do for you

We break down portfolios to find their asset allocations. We then benchmark the asset allocation of other portfolios. This is not as straight forward as it sounds due to the sheer number of asset classes out there (and clever marketing schemes).

All investment portfolios has an asset allocation that can be broken down and mirrored

Here are 3 examples of how we break down a portfolio:

Example 1: The 3 Fund Portfolio

This is a portfolio proposed by Taylor Larimore. It is straight forward and contains 3 asset classes. US stocks, international stocks, and bonds. We take the proposed asset allocation mentioned by Taylor Larimore and run it through our backtest engine that has data going back to 1989.

Example 2: The Goldman Sachs target-date retirement funds

These are one-stop funds. It means you can buy them as a fund and be done with it. But what do the funds contain – what are you buying? To find this out we need to go to the fund’s prospectus.

But here we find that the funds have an allocation to futures on the Russel 2000 index, which in layman terms mean it has exposure to a small-cap index. We then use a small-cap asset as a proxy.

We also find the fund has exposure to smart-beta beta funds. In this case, we need to look up those particular smart-beta funds and see what risk premia factor they are exposed to. Only then can we find an appropriate asset class to cover what the Goldman Sachs retirement fund smart-beta allocation.

Example 3: The case of the made-up asset classes

The third group of asset allocations is what I call made up asset classes. These are asset classes that are simply made up, either to sound smart for marketing purposes or because it is a mix of several asset classes. Some of these include hard-alternatives and aggressive income. To benchmark these we usually have to dig one layer deeper and discern what funds they use to cover those asset classes.

We like to think we take the Google approach to portfolio allocation. instead of coming up with one-optimal super optimized but non-existent herculean best asset allocation we will try to collect as many portfolios as possible and let the best surface. Whatever best means for you.

Why are you doing this?

To help you cut through the marketing speak, duplicity, murkiness, and the lingo that exists in the investing world. Some portfolios are not worth considering while some portfolios are a recommended must-have. Without a proper benchmarking list you would not be able to see which portfolios are crap and would leave you poor in retirement and which portfolios would leave you wealth beyond comparison!

Can I trust the data?

We take great pains in checking, rechecking and triple-checking the data we present. With the amount of data we juggle around however there are bound to be errors. We recommend to always do your due diligence before implementing a specific portfolio. If you do notice or even suspect an error we would love a shoutout so we can correct it

Some good tools to do due diligence:

Where do I go from here?

As a general rule, the longer timeframe you have the more risk your portfolio can handle. Risk is defined by either drawdown and/or volatility (standard deviation).

The first thing then is to find your timeframe. You can use our risk portfolios to determine your time frame. We have divided them into quintiles.

The very high-risk portfolios. They are suited for long-term savings like retirement and college savings with many years to go before needing the money.

The high-risk portfolios. They are suited for long-term savings like retirement and college savings with many years to go before needing the money.

The medium-risk portfolios. They are suited for medium-term savings or when you simply cannot see yourself going through a large draw-down that the high-risk portfolios potentially will expose you to.

The low-risk portfolios. They are suited for short term savings and even then you may be better off with a CD (certificate of deposit) or a standard savings account.

The very low-risk portfolios. They are suited for very short term savings and even then you may be better off with a CD (certificate of deposit) or a standard savings account.

You can find them all on the menu.

When you have considered your timeframe go to our post How To Invest Money: 5 Simple Steps That Work For Anyone. That will get you 99% way there.

How you can help

Tell us if there’s anything you are missing. It could include:

  • Portfolios we have missed.
  • Metrics you need.
  • Investing tools you can’t find anywhere.
  • Features you lack.

As always, thanks for reading.

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