Very Low-Risk Portfolios

This page displays very 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

Low-Risk Portfolios

This page is displaying 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.

Very 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%
The Permanent Portfolio416.20%5.75%6.60%0.63-3.23%
Tony Robbins / Ray Dalio Portfolio518.01%6.23%8.00%0.75-3.69%
Allan Roth Second Grader Low Portfolio314.50%5.76%6.90%0.67-8.28%
Allan Roth Second Grader Five-Fund Low Risk Portfolio414.47%5.74%6.91%0.68-8.28%
Allan Roth Second Grader Low Risk with CDs Portfolio39.74%3.66%4.85%0.38-10.34%
Larry Swedroe, The Larry Portfolio 1712.63%5.83%7.25%0.64-8.49%
Larry Swedroe, The Larry Portfolio 2310.47%4.93%7.40%0.83-3.70%
Meb Faber Risk Parity Portfolio715.12%5.28%6.80%0.67-7.82%
Rick Ferri Mature Retired Saver Moderate Basic Portfolio615.50%6.24%7.08%0.62-12.26%
Balanced Portfolio 10/90211.02%4.35%6.40%0.81-2.41%
Balanced Portfolio 20/80213.20%5.38%6.91%0.79-3.37%
Balanced Portfolio 30/70215.39%6.39%7.39%0.73-7.57%
Balanced Portfolio 40/60217.57%7.39%7.84%0.66-11.78%
Index Fund Advisors, Portfolio 301611.37%4.71%6.15%0.59-8.31%
Index Fund Advisors, Portfolio 20169.65%3.65%5.46%0.64-3.97%
Index Fund Advisors, Portfolio 10167.89%2.57%4.74%0.71-0.31%
Paul Merriman Best-in-Class ETFs Portfolio (Conservative)1512.37%5.82%7.34%0.64-10.65%
iShares Model Portfolio 20% Stocks415.59%6.48%7.14%0.63-10.68%
iShares Model Portfolio 15% Stocks412.52%5.19%6.64%0.77-3.58%
iShares Model Portfolio 10% Stocks311.86%5.00%6.63%0.83-2.85%
TD Ameritrade Core Portfolio Conservative513.35%5.33%6.68%0.7-6.09%
Merrill Lynch Edge Select Portfolio, Conservative1211.19%5.89%6.82%0.64-10.80%
David Booth (DFA) Fixed Income Portfolio46.85%1.80%4.38%0.56-1.53%
David Booth (DFA) Conservative Portfolio1510.40%3.87%5.71%0.73-2.85%
David Booth (DFA) Moderate Portfolio1513.94%5.87%6.92%0.6-12.06%
Rick Ferri's Core 4 fund Portfolio (20/80)412.64%4.98%6.62%0.76-3.79%
Vanguard LifeStrategy Income Fund (20/80)412.27%5.00%6.49%0.74-3.80%
T. Rowe Price ActivePlus Portfolio, Model 1059.49%3.95%6.13%0.76-2.36%
T. Rowe Price ActivePlus Portfolio, Model 20412.01%4.99%6.61%0.73-5.20%
T. Rowe Price ActivePlus Portfolio, Model 30413.87%5.84%6.94%0.66-9.54%
Schwab Managed Portfolio, Conservative Income67.74%3.51%5.53%0.68-2.02%
Schwab Managed Portfolio, Income With Growth1011.68%4.80%6.16%0.64-8.31%
All Seasons Portfolio817.10%5.70%7.77%0.72-4.20%
Morningstar Lifetime Allocation Index Conservative, Income1811.09%4.85%6.60%0.7-7.65%
Dimensional Retirement Income Fund79.54%4.28%5.50%0.52-8.22%
7-Twelve Portfolio Age Based 70 Plus by Craig Israelsen128.08%2.92%4.93%0.49-8.02%
Dan Solin SuperSmart Portfolio, Low Risk87.77%3.30%5.84%0.77-2.57%
Dan Solin SuperSmart Portfolio, Medium-Low Risk812.02%5.44%7.05%0.62-11.82%
Dan Solin The Smartest ETF Portfolio, Low Risk28.18%2.90%5.24%0.66-3.03%
Dan Solin The Smartest Index Portfolio, Low Risk312.67%5.00%6.62%0.76-3.79%
William Bernstein Taxable Ted 40/60516.02%6.72%7.37%0.63-12.13%
William Bernstein Taxable Ted 30/70514.23%5.89%7.04%0.7-7.84%
William Bernstein Taxable Ted 20/80512.43%5.04%6.67%0.77-3.54%
William Bernstein Taxable Ted 10/90510.63%4.19%6.28%0.8-2.17%
William Bernstein Taxable Ted 100% Bonds18.84%3.31%5.87%0.72-2.66%
William Bernstein Sheltered Sam 20/80129.98%5.05%6.38%0.63-10.80%
William Bernstein Sheltered Sam 10/90128.07%4.26%5.90%0.63-7.39%
William Bernstein Sheltered Sam 100% Bonds26.16%3.46%5.40%0.57-3.99%
Robo Advisor Betterment 301212.53%5.22%6.76%0.62-9.88%
Robo Advisor Betterment 20129.76%4.02%6.08%0.69-5.10%
Robo Advisor Betterment 10126.98%2.79%5.36%0.78-0.82%
Robo Advisor Betterment 024.22%1.56%4.62%0.67-0.48%
Rick Ferri Total Economy Core-4 Portfolio Low-Risk412.38%4.86%6.54%0.75-3.84%
Rick Ferri Global Markets Core-4 Low-Risk412.53%5.09%6.58%0.76-3.52%
Rick Ferri Global Markets Core-4 Conservative416.46%6.68%7.20%0.6-12.22%
Rick Ferri Inflation Fighter Core-4 Portfolio Low-Risk414.29%6.04%6.78%0.58-12.21%
Rick Ferri Socially Conscious ESG Core-4 Portfolio Low-Risk415.08%5.93%7.10%0.73-5.13%
3 Fund Portfolio 20/80312.72%4.99%6.60%0.76-3.62%
FPL Capital Management Portfolio 10910.41%4.19%6.43%0.82-2.08%
FPL Capital Management Portfolio 20911.98%5.04%6.95%0.81-3.78%
FPL Capital Management Portfolio 30913.56%5.88%7.46%0.75-8.19%
Assetbuilder.com Portfolio 5119.90%4.27%6.50%0.78-1.97%
Assetbuilder.com Portfolio 61211.54%5.27%7.14%0.7-6.82%
Assetbuilder.com Portfolio 71413.47%6.24%7.66%0.63-12.11%
Robo Advisor Wealthsimple Portfolio Conservative714.51%5.68%7.33%0.75-6.18%
Robo Advisor WiseBanyan 20% stocks913.22%5.73%6.84%0.67-8.80%
Robo Advisor WiseBanyan 13% stocks910.63%4.55%6.24%0.72-4.70%

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 very low-risk portfolio is right for you?

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