 |
| Source: Capital Pixel |
The diversified portfolio allocation is an appropriate benchmark for individuals in their 40s and even early 50s, depending on risk tolerance. The table contains sufficient data, however, to construct a benchmark and analyze performance for any specific allocation; and, in fact, the allocation can be changed over time--as it should be as the individual ages.
Voluminous data from unbiased academic studies have been presented over the years showing that a diversified portfolio of low-cost funds outperforms upwards of 70% of active managers over the longer term, after all costs are taken into account. These studies cover various time periods, countries, asset classes, and investment methodologies. In line with this data, the low-cost diversified approach warrants consideration as a benchmark for investors. It shouldn't go unnoticed that the approach economizes on the investor's time.
Below is an update showing the approximate performance of the diversified portfolio's sectors for the 1st quarter of 2014. Overall, the portfolio returned approximately 1.74%.
Disclosure: This post is intended for educational purposes only. Past performance is not indicative of future performance. Individuals should consult a professional or do their own research before making investment decisions.
Weight
|
Fund
|
Return
(%) 3 months ended 3/31/2014
|
Expense
Ratio
|
35
|
AGG
(Barclay’s Aggregate Bond Index)
|
1.87
|
.08
|
10
|
EFA
(EAFE Index)
|
0.61
|
.34
|
10
|
IWM
(Russell 2000)
|
1.11
|
.24
|
22.5
|
IWF
(Russell 1000 Growth)
|
1.08
|
.20
|
22.5
|
IWD
(Russell 3000)
|
2.97
|
.21
|
you must have meant 2014.
ReplyDeleteThank you for pointing out the typo!
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