What is Paul Merriman’s Ultimate Portfolio?
Paul Merriman’s Ultimate Portfolio can be built with 10 ETFs. It is a 100% stock portfolio and a high-risk portfolio. It is exposed to small-cap stocks and value stocks.
For the past 10 years, Paul Merriman’s Ultimate Portfolio has returned 10.79 with a standard deviation of 17.2. Last year it returned 6.4%. The dividend yield is 2.76%. The 30-year return is 9.35%. Year to date the Paul Merriman’s Ultimate Portfolio has returned -12.86%.
- What is the historical return for Paul Merriman’s Ultimate Portfolio?
- How do you build Paul Merriman’s Ultimate Portfolio with ETFs?
- Who is Paul Merriman?
- What is the Paul Merriman Ultimate Portfolio?
- What is the asset allocation for the Ultimate portfolio?
- Advantages and disadvantages of The Ultimate Portfolio
- Suggestions for your next steps
- Related questions
What is the historical return for Paul Merriman’s Ultimate Portfolio?
Below you can see the historical returns of Paul Merriman’s Ultimate Portfolio.
|Name||Asset class count||Year to date||Return in 2020||10 year return||CAGR since 1989 (%)||Risk level||Expense ratio|
|Merrimans Ultimate Portfolio||10||-12.86||6.4||10.79||9.35||3||0.17%|
How do you build Paul Merriman’s Ultimate Portfolio with ETFs?
Here is how you build Paul Merriman’s Ultimate Portfolio with ETFs:
- 10.00% US Large Cap Value (VTV)
- 10.00% US Large Cap (VV)
- 10.00% US Small Cap Value (VIOV)
- 10.00% US Small Cap (VIOO)
- 10.00% REITs (VNQ)
- 10.00% Emerging Markets (VWO)
- 10.00% International All-World ex-US (VEU)
- 10.00% International Large Cap Value (EFV)
- 10.00% International Small Cap Blend (VSS)
- 10.00% International Small Cap Value (DLS)
Who is Paul Merriman?
Paul Merriman is a long-time established expert and educator on personal finance and investing. His Sound Investing podcast has been a massive inspiration to me and thousands of others.
He is a contributor to Marketwatch. Paul Merriman has a very interesting and diverse investing philosophy. He favors diversification and a strong portion of stocks when you have plenty of time until retirement. He also favors going into the small-cap asset classes.
His Ultimate Portfolio has massive diversification and has a good amount invested in small caps. Small-cap stocks are stocks that have a small market capitalization. Small-cap stocks have historically outperformed larger-cap stocks.
What is the Paul Merriman Ultimate Portfolio?
The Ultimate Portfolios is also known as the Ultimate Buy and Hold portfolio.
The portfolio is made up of 10 asset classes, each contributing 10% to the portfolio. The portfolio has a tilt towards value and small-caps.
This means that the portfolio allocates a portion of its asset to small-cap and value stocks. These two asset classes have historically outperformed other asset classes.
What is the asset allocation for the Ultimate portfolio?
Advantages and disadvantages of The Ultimate Portfolio
- The Ultimate portfolio is thoroughly tested by Paul Merriman. Paul Merriman updates the portfolio each year on Marketwatch.
- The portfolio is easy to understand. You have 10 asset classes that are split 10 ways = 10 x 10.
- The portfolio provide great diversification across many asset classes.
- The Ultimate portfolio exposes you to 40% in small caps. Small-cap stocks has been one of the best historical performing asset classes.
- You might outperform the market if you use the Ultimate portfolio.
- Paul Merriman’s portfolio leaves you excellent opportunities for rebalancing. The act of rebalancing can reduce risk and may increase returns because you sell high and buy low.
- The portfolio has a higher risk than the S&P 500 as measured by standard deviation.
- The Ultimate portfolio makes a large bet on small caps which may not be what you want.
- Paul Merriman’s Ultimate portfolios may consist of too many asset classes for some people. This makes it more complicated with more moving parts.
Go here for a rebalance excel worksheet.
Here is his podcast for 2018 for the portfolio. He updates the portfolio every year.
Suggestions for your next steps
Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone
If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful.
Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.
Rebalancing lowers your portfolio risk and can increase your returns.
If you want access to our high-performing portfolios then you want to take a look at the premium portfolios. This is a paid product that gives you the 20 best-performing portfolios since 1989. The portfolios represent a great opportunity for you to get more money from your investment portfolios. We think it’s a “no-brainer”.
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What is the best asset class?
Small-cap value is the best performing asset class for the past 60 years. In the past 15 years value has lagged the broader market.
What is the two-fund portfolio?
The two fund portfolio is a portfolio built with 2 ETFs. It uses a target-date fund and a small-cap value fund.