Low-Risk Portfolios

This page displays low-risk portfolios available on portfolioeinstein.com.

Some words on risk

Risk comes in many shapes and forms. In academia and in much of the investing industry, risk in investing is measured by standard deviation (a measure of how much the price of an asset bounces around).

Now, a standard deviation is, well – academic. This is because, for you and me, the risk is the pain we go through when we lose money.  That pain is called draw-down. The draw-down of a portfolio is the amount of money the portfolio will lose in a  given year. So, for example, a portfolio with a draw-down of -20% has at some point lost 20% of its value. That’s a good indication of what could happen in the future.

Now, that’s pretty actionable information that we can plan around and relate to.

A rough rule of thumb is that for each 20% of stocks a portfolio has it has a draw-down of -10%. So a 100% stock portfolio has potentially a draw-down of -50%. A 60% stock portfolio has a potential draw-down of -30%.

There are other forms of risk however but the draw-down is what we will focus on when dividing the portfolios into the various risk levels. You should also look at standard deviation as well as the stock to bond ratio.

How the risk levels are determined

We have given the portfolios a risk level from 1-5.

1 is the least risky but also offers the least reward.

5 is the riskiest but offers the most rewards.

The portfolios have been divided into quintiles. The first quintile, the first 20% represent the portfolios that have the lowest draw-downs. The last 20% are the ones with the highest draw-downs.

You can find the other 4 risk portfolios here:

Very High-Risk Portfolios

High-Risk Portfolios

Medium-Risk Portfolios

Very Low-Risk Portfolios

This page is displaying 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.

Low-risk portfolios

Portfolio NameAsset AllocationNumber of asset classesYTD (incl. December 2019)10 year returnCAGR since 1989SharpeDrawdown
S&P 500 (Benchmark)131.25%12.97%9.84%0.48-37.71%
60/40 Portfolio221.93%9.35%8.64%0.57-20.20%
Bill Schultheis Coffeehouse Portfolio719.01%8.48%8.29%0.56-20.21%
Index Fund Advisors, Portfolio 501614.83%6.85%7.78%0.56-17.14%
The Marc Faber Portfolio620.64%7.56%7.59%0.51-16.87%
Scott Burns Couch Potato217.76%8.48%8.29%0.6-19.94%
Scott Burns Four Square416.30%6.95%6.99%0.46-19.60%
Larry Swedroe, Eliminate Fat Tails Portfolio48.92%4.87%6.76%0.5-13.59%
Larry Swedroe, Big Rocks Portfolio1116.04%7.35%7.77%0.52-20.68%
William Bernstein Cowards Portfolio916.87%7.38%7.88%0.54-19.93%
William Bernstein Four Pillars Medium Portfolio617.71%7.60%7.73%0.54-19.65%
William Bernstein Four Pillars Low Risk Portfolio416.12%6.58%7.14%0.55-15.89%
Rob Arnott Portfolio816.33%5.65%7.06%0.6-14.88%
The Global Market Portfolio, GMP CREDIT SUISSE819.30%7.64%7.97%0.6-15.83%
Robo Advisor Betterment 401115.30%6.45%7.39%0.57-14.52%
Harry Markowitz, Father of Modern Portfolio Theory, Portfolio219.75%8.38%8.26%0.61-15.99%
Rick Ferri Transitional Moderate Basic Portfolio518.20%7.31%7.49%0.55-17.11%
Rick Ferri Mature Retired Saver Moderate Multi Asset Portfolio1014.75%6.28%7.30%0.64-12.61%
Balanced Portfolio 50/50219.75%8.38%8.26%0.61-15.99%
Index Fund Advisors, Portfolio 401613.10%5.76%6.81%0.55-12.64%
The Jack Bogle Portfolio221.93%9.35%8.64%0.57-20.20%
Paul Merriman Best-in-Class ETFs Portfolio (Moderate)1515.99%7.48%8.03%0.53-20.03%
Paul Merriman Target Date Portfolio (65 year old)1414.10%7.13%7.96%0.61-14.68%
iShares Lifepath Fund715.89%6.56%7.21%0.59-13.57%
iShares Model Portfolio 55% Stocks418.03%7.28%7.28%0.5-17.73%
iShares Model Portfolio 51% Stocks418.78%7.51%7.35%0.48-19.59%
iShares Model Portfolio 40% Stocks418.03%7.28%7.28%0.5-17.73%
iShares Model Portfolio 36% Stocks416.30%6.74%7.22%0.59-12.51%
TD Ameritrade Core Portfolio Moderate516.12%6.44%7.07%0.58-12.84%
TD Ameritrade Core Portfolio Moderate Growth517.96%7.15%7.28%0.51-17.34%
Morningstar Conservative Retirement Saver Portfolio718.11%7.65%7.91%0.56-18.49%
Merrill Lynch Edge Select Portfolio, Moderately Conservative1216.57%8.34%8.27%0.59-19.74%
Rick Ferri's Core 4 fund Portfolio (40/60))416.44%6.58%7.27%0.62-12.63%
Vanguard LifeStrategy Conservative Growth (40/60)416.00%6.47%7.03%0.57-12.87%
Tim Maurer Simple Money Portfolio715.85%7.38%7.62%0.49-19.40%
T. Rowe Price ActivePlus Portfolio, Model 40415.93%6.63%7.23%0.59-13.64%
T. Rowe Price ActivePlus Portfolio, Model 50417.95%7.44%7.53%0.54-18.00%
Schwab Managed Portfolio, Balanced1115.25%5.70%6.83%0.52-17.24%
Meb Faber GAA1018.97%6.80%7.56%0.59-15.98%
Morningstar Lifetime Allocation Index Aggressive, Income1816.19%6.95%7.62%0.58-17.81%
Morningstar Lifetime Allocation Index Moderate, Income1813.78%5.96%7.16%0.64-13.00%
Morningstar Lifetime Allocation Index Conservative, 20301816.53%6.78%7.59%0.59-16.47%
7-Twelve Portfolio Age Based 50-60 by Craig Israelsen1214.12%5.40%6.73%0.49-18.12%
7-Twelve Portfolio Age Based 60-70 by Craig Israelsen1211.10%4.18%5.85%0.49-13.07%
Dan Solin The Smartest ETF Portfolio, Medium-Low Risk212.84%4.64%5.84%0.45-12.74%
Dan Solin The Smartest Index Portfolio, Medium-Low Risk316.51%6.63%7.25%0.6-12.63%
TIAA-CREF Lifecycle Index Retirement Income615.64%6.50%7.35%0.61-13.33%
William Bernstein Taxable Ted 60/40519.61%8.34%7.96%0.53-20.73%
William Bernstein Taxable Ted 50/50517.82%7.53%7.68%0.57-16.43%
William Bernstein Sheltered Sam 40/601213.80%6.60%7.26%0.58-17.62%
William Bernstein Sheltered Sam 30/701211.89%5.83%6.83%0.6-14.21%
William Bernstein Young Yvonne Portfolio1118.70%8.06%8.29%0.57-20.82%
William Bernstein Charlie Cringe Portfolio416.20%6.55%7.11%0.55-15.61%
William Bernstein Between Charlie and Wendy Portfolio617.79%7.57%7.70%0.53-19.37%
Goldman Sachs Target Date 2025 Portfolio1318.94%7.68%7.62%0.54-19.22%
Robo Advisor Betterment 501017.29%7.23%7.81%0.53-19.01%
Rick Ferri Total Economy Core-4 Portfolio Conservative415.92%6.34%7.09%0.6-12.74%
Rick Ferri Inflation Fighter Core-4 Portfolio Conservative417.47%7.06%7.05%0.51-19.51%
Rick Ferri Income Seeker Core-4 Portfolio Low-Risk417.57%7.45%7.39%0.6-13.38%
Rick Ferri Income Seeker Core-4 Portfolio Conservative417.39%8.19%7.74%0.56-19.01%
Rick Ferri Socially Conscious ESG Core-4 Portfolio Conservative418.37%7.31%7.59%0.61-13.43%
3 Fund Portfolio 40/60316.60%6.60%7.22%0.6-12.30%
FPL Capital Management Portfolio 40915.13%6.70%7.93%0.68-12.60%
FPL Capital Management Portfolio 50916.70%7.51%8.37%0.63-17.02%
Assetbuilder.com Portfolio 81415.24%7.15%8.09%0.56-17.83%
Robo Advisor WiseBanyan 40% stocks917.07%7.30%7.53%0.57-16.94%
Robo Advisor WiseBanyan 30% stocks915.29%6.58%7.25%0.62-12.93%

Disclaimer: There are many factors that go into choosing your right portfolio, though not as many as you would think. Therefore, the information here presented are not specific recommendations but instead for information purposes only.

Now it’s your turn!

Which portfolio are you leaning towards and why?

Why do you think a low-risk portfolio is right for you?

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