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:
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 Name | Asset Allocation | Number of asset classes | YTD (incl. December 2019) | 10 year return | CAGR since 1989 | Sharpe | Drawdown |
|---|---|---|---|---|---|---|---|
| S&P 500 (Benchmark) |  | 1 | 31.25% | 12.97% | 9.84% | 0.48 | -37.71% |
| 60/40 Portfolio | | 2 | 21.93% | 9.35% | 8.64% | 0.57 | -20.20% |
| Bill Schultheis Coffeehouse Portfolio | | 7 | 19.01% | 8.48% | 8.29% | 0.56 | -20.21% |
| Index Fund Advisors, Portfolio 50 | | 16 | 14.83% | 6.85% | 7.78% | 0.56 | -17.14% |
| The Marc Faber Portfolio | | 6 | 20.64% | 7.56% | 7.59% | 0.51 | -16.87% |
| Scott Burns Couch Potato | | 2 | 17.76% | 8.48% | 8.29% | 0.6 | -19.94% |
| Scott Burns Four Square | | 4 | 16.30% | 6.95% | 6.99% | 0.46 | -19.60% |
| Larry Swedroe, Eliminate Fat Tails Portfolio | | 4 | 8.92% | 4.87% | 6.76% | 0.5 | -13.59% |
| Larry Swedroe, Big Rocks Portfolio | | 11 | 16.04% | 7.35% | 7.77% | 0.52 | -20.68% |
| William Bernstein Cowards Portfolio | | 9 | 16.87% | 7.38% | 7.88% | 0.54 | -19.93% |
| William Bernstein Four Pillars Medium Portfolio | | 6 | 17.71% | 7.60% | 7.73% | 0.54 | -19.65% |
| William Bernstein Four Pillars Low Risk Portfolio | | 4 | 16.12% | 6.58% | 7.14% | 0.55 | -15.89% |
| Rob Arnott Portfolio | | 8 | 16.33% | 5.65% | 7.06% | 0.6 | -14.88% |
| The Global Market Portfolio, GMP CREDIT SUISSE | | 8 | 19.30% | 7.64% | 7.97% | 0.6 | -15.83% |
| Robo Advisor Betterment 40 | | 11 | 15.30% | 6.45% | 7.39% | 0.57 | -14.52% |
| Harry Markowitz, Father of Modern Portfolio Theory, Portfolio | | 2 | 19.75% | 8.38% | 8.26% | 0.61 | -15.99% |
| Rick Ferri Transitional Moderate Basic Portfolio | | 5 | 18.20% | 7.31% | 7.49% | 0.55 | -17.11% |
| Rick Ferri Mature Retired Saver Moderate Multi Asset Portfolio | | 10 | 14.75% | 6.28% | 7.30% | 0.64 | -12.61% |
| Balanced Portfolio 50/50 | | 2 | 19.75% | 8.38% | 8.26% | 0.61 | -15.99% |
| Index Fund Advisors, Portfolio 40 | | 16 | 13.10% | 5.76% | 6.81% | 0.55 | -12.64% |
| The Jack Bogle Portfolio | | 2 | 21.93% | 9.35% | 8.64% | 0.57 | -20.20% |
| Paul Merriman Best-in-Class ETFs Portfolio (Moderate) | | 15 | 15.99% | 7.48% | 8.03% | 0.53 | -20.03% |
| Paul Merriman Target Date Portfolio (65 year old) | | 14 | 14.10% | 7.13% | 7.96% | 0.61 | -14.68% |
| iShares Lifepath Fund | | 7 | 15.89% | 6.56% | 7.21% | 0.59 | -13.57% |
| iShares Model Portfolio 55% Stocks | | 4 | 18.03% | 7.28% | 7.28% | 0.5 | -17.73% |
| iShares Model Portfolio 51% Stocks | | 4 | 18.78% | 7.51% | 7.35% | 0.48 | -19.59% |
| iShares Model Portfolio 40% Stocks | | 4 | 18.03% | 7.28% | 7.28% | 0.5 | -17.73% |
| iShares Model Portfolio 36% Stocks | | 4 | 16.30% | 6.74% | 7.22% | 0.59 | -12.51% |
| TD Ameritrade Core Portfolio Moderate | | 5 | 16.12% | 6.44% | 7.07% | 0.58 | -12.84% |
| TD Ameritrade Core Portfolio Moderate Growth | | 5 | 17.96% | 7.15% | 7.28% | 0.51 | -17.34% |
| Morningstar Conservative Retirement Saver Portfolio | | 7 | 18.11% | 7.65% | 7.91% | 0.56 | -18.49% |
| Merrill Lynch Edge Select Portfolio, Moderately Conservative | | 12 | 16.57% | 8.34% | 8.27% | 0.59 | -19.74% |
| Rick Ferri's Core 4 fund Portfolio (40/60)) | | 4 | 16.44% | 6.58% | 7.27% | 0.62 | -12.63% |
| Vanguard LifeStrategy Conservative Growth (40/60) | | 4 | 16.00% | 6.47% | 7.03% | 0.57 | -12.87% |
| Tim Maurer Simple Money Portfolio | | 7 | 15.85% | 7.38% | 7.62% | 0.49 | -19.40% |
| T. Rowe Price ActivePlus Portfolio, Model 40 | | 4 | 15.93% | 6.63% | 7.23% | 0.59 | -13.64% |
| T. Rowe Price ActivePlus Portfolio, Model 50 | | 4 | 17.95% | 7.44% | 7.53% | 0.54 | -18.00% |
| Schwab Managed Portfolio, Balanced | | 11 | 15.25% | 5.70% | 6.83% | 0.52 | -17.24% |
| Meb Faber GAA | | 10 | 18.97% | 6.80% | 7.56% | 0.59 | -15.98% |
| Morningstar Lifetime Allocation Index Aggressive, Income | | 18 | 16.19% | 6.95% | 7.62% | 0.58 | -17.81% |
| Morningstar Lifetime Allocation Index Moderate, Income | | 18 | 13.78% | 5.96% | 7.16% | 0.64 | -13.00% |
| Morningstar Lifetime Allocation Index Conservative, 2030 | | 18 | 16.53% | 6.78% | 7.59% | 0.59 | -16.47% |
| 7-Twelve Portfolio Age Based 50-60 by Craig Israelsen | | 12 | 14.12% | 5.40% | 6.73% | 0.49 | -18.12% |
| 7-Twelve Portfolio Age Based 60-70 by Craig Israelsen | | 12 | 11.10% | 4.18% | 5.85% | 0.49 | -13.07% |
| Dan Solin The Smartest ETF Portfolio, Medium-Low Risk | | 2 | 12.84% | 4.64% | 5.84% | 0.45 | -12.74% |
| Dan Solin The Smartest Index Portfolio, Medium-Low Risk | | 3 | 16.51% | 6.63% | 7.25% | 0.6 | -12.63% |
| TIAA-CREF Lifecycle Index Retirement Income | | 6 | 15.64% | 6.50% | 7.35% | 0.61 | -13.33% |
| William Bernstein Taxable Ted 60/40 | | 5 | 19.61% | 8.34% | 7.96% | 0.53 | -20.73% |
| William Bernstein Taxable Ted 50/50 | | 5 | 17.82% | 7.53% | 7.68% | 0.57 | -16.43% |
| William Bernstein Sheltered Sam 40/60 | | 12 | 13.80% | 6.60% | 7.26% | 0.58 | -17.62% |
| William Bernstein Sheltered Sam 30/70 | | 12 | 11.89% | 5.83% | 6.83% | 0.6 | -14.21% |
| William Bernstein Young Yvonne Portfolio | | 11 | 18.70% | 8.06% | 8.29% | 0.57 | -20.82% |
| William Bernstein Charlie Cringe Portfolio | | 4 | 16.20% | 6.55% | 7.11% | 0.55 | -15.61% |
| William Bernstein Between Charlie and Wendy Portfolio | | 6 | 17.79% | 7.57% | 7.70% | 0.53 | -19.37% |
| Goldman Sachs Target Date 2025 Portfolio | | 13 | 18.94% | 7.68% | 7.62% | 0.54 | -19.22% |
| Robo Advisor Betterment 50 | | 10 | 17.29% | 7.23% | 7.81% | 0.53 | -19.01% |
| Rick Ferri Total Economy Core-4 Portfolio Conservative | | 4 | 15.92% | 6.34% | 7.09% | 0.6 | -12.74% |
| Rick Ferri Inflation Fighter Core-4 Portfolio Conservative | | 4 | 17.47% | 7.06% | 7.05% | 0.51 | -19.51% |
| Rick Ferri Income Seeker Core-4 Portfolio Low-Risk | | 4 | 17.57% | 7.45% | 7.39% | 0.6 | -13.38% |
| Rick Ferri Income Seeker Core-4 Portfolio Conservative | | 4 | 17.39% | 8.19% | 7.74% | 0.56 | -19.01% |
| Rick Ferri Socially Conscious ESG Core-4 Portfolio Conservative | | 4 | 18.37% | 7.31% | 7.59% | 0.61 | -13.43% |
| 3 Fund Portfolio 40/60 | | 3 | 16.60% | 6.60% | 7.22% | 0.6 | -12.30% |
| FPL Capital Management Portfolio 40 | | 9 | 15.13% | 6.70% | 7.93% | 0.68 | -12.60% |
| FPL Capital Management Portfolio 50 | | 9 | 16.70% | 7.51% | 8.37% | 0.63 | -17.02% |
| Assetbuilder.com Portfolio 8 | | 14 | 15.24% | 7.15% | 8.09% | 0.56 | -17.83% |
| Robo Advisor WiseBanyan 40% stocks | | 9 | 17.07% | 7.30% | 7.53% | 0.57 | -16.94% |
| Robo Advisor WiseBanyan 30% stocks | | 9 | 15.29% | 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?