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8 Lazy ETF Portfolios December 23, 2010

Filed under: Invest — ilcourtilcourt @ 13:37

I’m a firm believer that investing doesn’t have to be complicated and that it doesn’t have to require a great deal of ongoing effort. In that vein, I’m always drawn to “lazy portfolios.” The following are ETF renditions of some of the most popular lazy portfolios.Most of them could be done just as well using regular Vanguard index funds. The ETF versions simply allow you to implement the portfolios at your brokerage firm of choice, and perhaps reduce costs and taxes somewhat.

1. Allan Roth’s Second Grader Portfolio

  • 60% Vanguard Total Stock Market ETF (VTI)
  • 30% Vanguard FTSE All-World Ex-U.S. ETF (VEU)
  • 10% Vanguard Total Bond Market ETF (BND)

The asset allocation between the funds is clearly intended for a younger, more aggressive investor. But Roth’s idea of keeping it simple applies to everyone. Even for investors close to (or in) retirement, these three ETFs should get the job done.

2. David Swenson’s Ivy League Portfolio

  • 30% Vanguard Total Stock Market ETF (VTI)
  • 5% Vanguard Emerging Mkts ETF (VWO)
  • 15% Vanguard Europe Pacific ETF (VEA)
  • 20% Vanguard REIT ETF (VNQ)
  • 15% Vanguard Intermediate-Term Government Bond ETF (VGIT)
  • 15%  (TIP)

David Swenson, the Chief Investment Officer at Yale University, recommends the above portfolio (a 70/30 stock/bond allocation) in his Unconventional Success. He is a big proponent of equity-oriented allocations for investors with long time horizons.

3. Rick Ferri’s Core Four Portfolio

  • 36% Vanguard Total Stock Market ETF (VTI)
  • 18% Vanguard FTSE All-World Ex-U.S. ETF (VEU)
  • 6% Vanguard REIT ETF (VNQ)
  • 40% Vanguard Total Bond Market ETF (BND)

You only need a few asset classes in your portfolio, and after that there are diminishing returns. The mutual funds you choose to represent those asset classes should be the lowest cost funds you can buy.” –Rick Ferri, CFA on the Bogleheads Forum

4. Bill Schultheis’ Coffeehouse Portfolio

  • 10% Vanguard S&P 500 Index ETF (VOO)
  • 10% Vanguard Value ETF (VTV)
  • 10% Vanguard Small-Cap ETF (VB)
  • 10% Vanguard Small-Cap Value ETF (VBR)
  • 10% Vanguard FTSE All-World Ex-U.S. ETF (VEU)
  • 10% Vanguard REIT ETF (VNQ)
  • 40% Vanguard Total Bond Market ETF (BND)

The title of Bill’s book, “The New Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get on with Your Life” is spot on. The above portfolio is intended to be rebalanced once per year and otherwise left alone. Sounds good to me.

5. Larry Swedroe’s Big Rocks Portfolio

  • 9% Vanguard S&P 500 Index ETF (VOO)
  • 9% Vanguard Value ETF (VTV)
  • 9% Vanguard Small-Cap ETF (VB)
  • 9% Vanguard Small-Cap Value ETF (VBR)
  • 6% Vanguard REIT ETF (VNQ)
  • 3% Vanguard FTSE All-World Ex-U.S. ETF (VEU)
  • 6% SPDR S&P International Dividend (DWX)
  • 3% Vanguard FTSE AW ex-US Sm-Cap ETF (VSS)
  • 3% WisdomTree International SmallCap Div (DLS)
  • 3% Vanguard Emerging Mkts ETF (VWO)
  • 40% Vanguard Short-Term Bond ETF (BSV)

You’ll note that Swedroe’s portfolio is significantly tilted toward small-cap and value equities (with the reasoning that their higher risk levels should bring higher expected returns). It’s more funds than I’d personally like, but Swedroe makes a valid point that if you’re only rebalancing annually, the additional effort required by having a few more funds in your portfolio is pretty minor.

6. Harry Browne’s Permanent Portfolio

  • 25% Vanguard S&P 500 Index ETF (VOO)
  • 25% Vanguard Long-Term Government Bond ETF (VGLT)
  • 25% Cash (i.e., money market funds)
  • 25% SPDR Gold Trust ETF (GLD)

The idea behind Browne’s Permanent Portfolio is that the four asset classes have sufficiently low correlation that the portfolio should be able to put up modest gains each year under just about any circumstance imaginable.

7. William Bernstein’s No Brainer Portfolio

  • 25% Vanguard S&P 500 Index ETF (VOO)
  • 25% Vanguard Small-Cap ETF (VB)
  • 25% Vanguard FTSE All-World Ex-U.S. ETF (VEU)
  • 25% Vanguard Total Bond Market ETF (BND)

Bernstein, author of The Four Pillars of Investing, suggests the above portfolio for investors with a long time horizon. Note that it’s very similar to the first portfolio mentioned above (Roth’s Second Grader Portfolio), but with a much heavier allocation toward small-cap domestic stocks.

8. Harry Markowitz’s “Father of Modern Portfolio Theory” Portfolio

  • 50% Vanguard Total World Stock ETF (VT)
  • 50% Vanguard Total Bond Market ETF (BND)

Harry Markowitz–Nobel Prize winner and originator of Modern Portfolio Theory–when asked about his personal portfolio once replied, “I should have computed the historical co-variances of the asset classes and drawn an efficient frontier…Instead, I split my contributions 50/50 between bonds and equities.” The above portfolio is a somewhat tongue-in-cheek implementation of Markowitz’s approach.

via 8 Lazy ETF Portfolios.


Some people need to get with the program! December 22, 2010

Filed under: Technology — ilcourtilcourt @ 23:29

Seems some have not yet realised there is something called “globalisation” happening

How do I use YNAB with multiple currencies?

YNAB can handle virtually any single foreign currency, but it does not support multiple currencies in a single budget file. We have our eyes on this functionality for a future release, but do not have a specific date set.One workaround is to set up a budget file for each currency. While this isn’t as elegant as having it all in one file, it’s the best we have to offer at this point.

via Frequently Asked Questions about the YNAB Personal Budgeting Software.


Keep track of the margin December 20, 2010

Filed under: Technology — ilcourtilcourt @ 20:42

I am not sure R&D numbers are comparable across companies as companies tend to aggregate different things in there, but the article makes a good read. I certainly never understood how RIM stayed in the phone business (vs. the services)

Yeah, I know there are some people who like the Torch. But there were also people who thought MS-DOS was easy to use.

Mobile Opportunity: Whats really wrong with BlackBerry and what to do about it.


How many can afford the rent? December 14, 2010

Filed under: Life In Singapore — ilcourtilcourt @ 12:01

A post from before the crising on why  Singapore psf was too high vs. the number of people who could afford the rent.

A reminder that the Singapore market is not a rental market, but a speculative market: as long as you find someone to buy your hot potato, you’re in luck (one unknown is always whether the PAP will keep potatoes rare and exclusive like deBeers does with its pressured coal).

charging $4,000 per mth for rental, it’s a once in a lifetime chance, it won’t last

via Eight percent per annum: Value investing in Singapore stocks: The Singapore Property Market: Personal Take II.


2007 Article in IHT December 8, 2010

Filed under: Life In Singapore,Politics — ilcourtilcourt @ 07:43

But last year Singapore’s government revealed that while average wages were rising with the economy, incomes among the bottom 30 percent of households had actually fallen since 2000.

via Singapore tries to redress income gap – Business – International Herald Tribune – The New York Times.


Timeless Facade: Ootoya Suntec/O Central December 7, 2010

Filed under: Life In Singapore,Where to eat — ilcourtilcourt @ 21:15

To check out: Ootoya family restaurant

Final Verdict:
Value for money:7.5/10
Address: #B1-057 Suntec City & #08-12 Orchard Central
Contact: 6884-8901 Suntec & 6837-3718 Orchard
Opening Hours: Daily: 12pm – 9.30pm

via Timeless Facade – Everything is a facade, only good food is a reality: Ootoya.


Christmas Gifts Ideas: Kindle books

Filed under: Books,Entertainment,Technology — ilcourtilcourt @ 14:17

I love this new world of e-books, it opens so many possibilities; now, if only we could lend books….

You can also give specific book titles as Kindle gifts; if a recipient doesn’t want that particular book, he or she can convert the gift to a Kindle gift certificate. Also worth noting is that your friend receives an email message when the gift is purchased, so if you want to keep it a secret until December 25th, you’ll need to place the order on that day.

via TidBITS Just for Fun: TidBITS Gift Guide 2010.