This page displays medium-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 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.
Medium-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% |
| 4 Fund Portfolio | | 4 | 20.24% | 8.14% | 7.80% | 0.51 | -21.47% |
| 7Twelve Portfolio | | 12 | 17.15% | 6.61% | 7.57% | 0.49 | -23.19% |
| David Swensen's Portfolio | | 6 | 20.95% | 8.86% | 8.55% | 0.53 | -26.20% |
| Index Fund Advisors, Portfolio 60 | | 16 | 16.56% | 7.85% | 8.31% | 0.53 | -21.64% |
| The Talmud Portfolio | | 3 | 22.88% | 9.68% | 9.04% | 0.6 | -24.14% |
| Ted Aronson Family Taxable Portfolio | | 11 | 19.65% | 9.14% | 8.36% | 0.46 | -26.53% |
| Allan Roth Second Grader Medium Risk Portfolio | | 3 | 20.17% | 8.06% | 7.66% | 0.49 | -21.61% |
| Allan Roth Second Grader Five-Fund Medium Risk Portfolio | | 4 | 20.10% | 8.03% | 7.68% | 0.5 | -21.61% |
| Allan Roth Second Grader Medium Risk with CDs Portfolio | | 3 | 17.44% | 6.86% | 6.48% | 0.38 | -22.79% |
| Frank Armstrong Ideal Index Portfolio | | 7 | 18.03% | 7.48% | 7.19% | 0.41 | -25.74% |
| Scott Burns Five Fold | | 5 | 18.83% | 8.00% | 7.72% | 0.51 | -23.09% |
| Scott Burns Six Ways from Sunday | | 6 | 17.65% | 7.44% | 8.26% | 0.53 | -26.39% |
| Larry Swedroe Simple Portfolio | | 6 | 15.29% | 8.09% | 8.27% | 0.52 | -23.85% |
| The Global Market Portfolio, Financial Engines 2007 | | 15 | 19.87% | 8.16% | 8.04% | 0.5 | -23.12% |
| Robo Advisor Betterment 60 | | 10 | 18.93% | 7.93% | 8.08% | 0.5 | -23.25% |
| Robo Advisor Wealthfront 40 | | 7 | 22.31% | 8.96% | 8.40% | 0.52 | -25.94% |
| Rick Ferri Early Saver Moderate Basic Portfolio | | 4 | 22.17% | 8.94% | 8.08% | 0.49 | -25.82% |
| Rick Ferri Midlife Moderate Basic Portfolio | | 4 | 20.29% | 8.19% | 7.86% | 0.52 | -21.40% |
| Rick Ferri Midlifer Moderate Multi Asset Portfolio | | 11 | 19.32% | 8.92% | 8.63% | 0.54 | -24.53% |
| Rick Ferri Transitional Moderate Multi Asset Portfolio | | 12 | 17.62% | 8.25% | 8.24% | 0.56 | -20.84% |
| Balanced Portfolio 70/30 | | 2 | 24.12% | 10.31% | 9.00% | 0.54 | -24.41% |
| Index Fund Advisors, Portfolio 70 | | 16 | 18.29% | 8.76% | 8.58% | 0.5 | -25.65% |
| Paul Merriman Target Date Portfolio (55 year old) | | 14 | 18.82% | 9.54% | 9.10% | 0.52 | -26.44% |
| iShares LifePath Index 2030 Fund (55 year old) | | 7 | 21.81% | 8.72% | 7.93% | 0.48 | -26.20% |
| iShares Model Portfolio 70% Stocks | | 4 | 21.48% | 8.47% | 7.54% | 0.42 | -26.42% |
| iShares Model Portfolio 65% Stocks | | 4 | 20.72% | 8.27% | 7.57% | 0.45 | -24.02% |
| JL Collins, Simple Path To Wealth, Wealth Preservation Portfolio | | 2 | 25.21% | 10.79% | 9.16% | 0.53 | -26.52% |
| Paul Merriman FundAdvice Ultimate Buy and Hold | | 13 | 16.14% | 7.37% | 7.95% | 0.5 | -21.68% |
| TD Ameritrade Core Portfolio Growth | | 5 | 21.63% | 8.55% | 7.62% | 0.43 | -26.33% |
| Vanguard Target Retirement 2030 (55 year old) | | 4 | 21.60% | 8.56% | 7.59% | 0.43 | -26.42% |
| Merrill Lynch Edge Select Portfolio, Moderately | | 12 | 19.64% | 9.15% | 8.59% | 0.54 | -25.30% |
| David Booth (DFA) Normal Portfolio | | 15 | 17.49% | 7.80% | 8.00% | 0.53 | -21.28% |
| Vanguard LifeStrategy Moderate Growth (60/40) | | 4 | 19.73% | 7.88% | 7.44% | 0.46 | -21.92% |
| William Bernstein Sheltered Sam Portfolio | | 12 | 16.79% | 7.57% | 7.99% | 0.55 | -21.69% |
| T. Rowe Price ActivePlus Portfolio, Model 60 | | 4 | 20.06% | 8.21% | 7.76% | 0.5 | -22.03% |
| T. Rowe Price ActivePlus Portfolio, Model 70 | | 4 | 22.14% | 8.96% | 7.96% | 0.46 | -26.13% |
| Schwab Target Date Fund 2030 (55 year old) | | 8 | 21.36% | 8.60% | 8.03% | 0.48 | -25.67% |
| Schwab Managed Portfolio, Balanced With Growth | | 11 | 18.90% | 7.03% | 7.42% | 0.46 | -25.07% |
| Time.Inc Money Portfolio 1, Simple and Cheap | | 5 | 19.90% | 8.02% | 7.70% | 0.51 | -21.56% |
| Time.Inc Money Portfolio 2, Tilt Toward Value | | 7 | 19.78% | 8.26% | 7.98% | 0.54 | -20.91% |
| Meb Faber GTAA Conservative | | 11 | 17.84% | 6.10% | 8.10% | 0.58 | -21.92% |
| Morningstar Lifetime Allocation Index Moderate, 2030 | | 18 | 20.33% | 8.34% | 8.24% | 0.5 | -26.08% |
| Morningstar Lifetime Allocation Index Conservative, 2040 | | 18 | 20.45% | 8.35% | 8.25% | 0.5 | -25.86% |
| Dimensional 2030 Target Date Retirement Income Fund | | 8 | 18.59% | 7.39% | 7.35% | 0.47 | -23.00% |
| Dan Solin SuperSmart Portfolio, Medium | | 8 | 16.27% | 7.50% | 8.13% | 0.54 | -21.06% |
| Dan Solin The Smartest ETF Portfolio, Medium Risk | | 2 | 17.49% | 6.31% | 6.29% | 0.36 | -22.46% |
| Dan Solin The Smartest Index Portfolio, Medium Risk | | 3 | 20.34% | 8.19% | 7.76% | 0.5 | -21.47% |
| TIAA-CREF Lifecycle 2030 | | 6 | 22.04% | 8.97% | 8.30% | 0.49 | -25.56% |
| William Bernstein Taxable Ted 70/30 | | 5 | 21.41% | 9.13% | 8.21% | 0.5 | -25.03% |
| William Bernstein Sheltered Sam 60/40 | | 12 | 17.63% | 8.10% | 8.06% | 0.53 | -24.43% |
| William Bernstein Sheltered Sam 50/50 | | 12 | 15.72% | 7.36% | 7.67% | 0.55 | -21.02% |
| Goldman Sachs Target Date 2035 Portfolio | | 12 | 21.74% | 8.72% | 8.07% | 0.49 | -26.10% |
| Rick Ferri Total Economy Core-4 Portfolio Moderate | | 4 | 19.46% | 7.76% | 7.54% | 0.49 | -21.64% |
| Rick Ferri Global Markets Core-4 Moderate | | 4 | 20.39% | 8.20% | 7.69% | 0.49 | -20.92% |
| Rick Ferri Income Seeker Core-4 Portfolio Moderate | | 4 | 17.11% | 8.90% | 8.01% | 0.51 | -24.65% |
| Rick Ferri Socially Conscious ESG Core-4 Portfolio Moderate | | 4 | 21.66% | 8.62% | 7.96% | 0.51 | -21.73% |
| 3 Fund Portfolio 60/40 | | 3 | 20.49% | 8.15% | 7.71% | 0.5 | -20.97% |
| 3 Fund Portfolio Equal Weight | | 3 | 20.81% | 7.81% | 7.16% | 0.41 | -24.56% |
| Paul Merriman Ultimate Buy & Hold Strategy 2010 | | 12 | 18.82% | 8.10% | 8.33% | 0.51 | -23.69% |
| FPL Capital Management Portfolio 60 | | 9 | 18.28% | 8.30% | 8.78% | 0.59 | -21.43% |
| FPL Capital Management Portfolio 70 | | 9 | 19.85% | 9.07% | 9.16% | 0.56 | -25.85% |
| Fundamentum Enhanced Index Focus Moderate | | 5 | 21.06% | 8.82% | 8.19% | 0.53 | -21.63% |
| Assetbuilder.com Portfolio 9 | | 14 | 16.72% | 8.02% | 8.52% | 0.51 | -23.05% |
| Robo Advisor Wealthsimple Portfolio Balanced | | 9 | 21.59% | 8.39% | 8.30% | 0.52 | -24.58% |
| Robo Advisor WiseBanyan 60% stocks | | 9 | 20.61% | 8.52% | 7.95% | 0.49 | -24.77% |
| Robo Advisor WiseBanyan 50% stocks | | 9 | 18.83% | 7.93% | 7.75% | 0.53 | -20.92% |
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 medium-risk portfolio is right for you?