ILAB 86 – Index Fund Allocation Modeling with Johnny & Sam

“The best portfolio is the one that you can keep.”

Sam Marks

Co-hosts Johnny and Sam are entrepreneurs and investors who share their investment strategies and experiences to all the listeners. This episode is an overview of index fund allocation combined with personal recommendations, understanding from influential books, and insights from the experts.

On this episode, Johnny and Sam explain the basics of index funds, stocks, and asset allocation. They discuss investment strategies which helps investors balance their portfolio while minimizing risks. They also talk about fundamental considerations when starting index fund investing, basic asset allocation modeling, and portfolio building. They also present the Buy-and-Hold Portfolio of several investment authorities that will surely help you decide what asset allocation model is perfect for you.

Listen to ILAB 86 on iTunes here or subscribe on your favorite podcast app.

ILAB 86 Show Notes


Where we are:

Johnny – Thailand

Sam – U.S.A.

 

Links:

3 Investment Gurus Share Their Model Portfolios

The All Seasons Portfolio (Aka The Tony Robbins Portfolio)

The ultimate buy-and-hold portfolio

Paulmerriman.com/vanguard/

Paulmerriman.com/whats-wrong-vanguard-small-cap-value/

 

Recommended:

ArtofFX – start with just a $10,000 account (reduced from $25,000)

Fundrise – start with only $1,000 into their REIT funds (non-accredited investors OK)

RealtyShares – try it free

 

Books:

MONEY Master the Game

Unshakeable

 

Discussed:

ILAB 15 – Meb Faber on Building The All Seasons Portfolio

 

Experts Buy and Hold Portfolios

 

John Thomas (Mad Hedgefund Trader)

20% domestic US stocks (SPY)

20% international stocks (IXUS)

10% emerging stock markets (EEM)

20% Real Estate Investment Trusts (VNQ)

15% long term US Treasury Bonds (TLT)

15% Treasury Inflation Protected Securities (TIP)

 

David Swenson

20% Domestic Stocks

20% International Equities

10% Emerging Markets

20% Real Estate Investment Trusts REITs

15% US Long Term Treasuries

15% TIPS

 

Ray Dalio

30% stocks S&P 500, indexes

15% intermediate term gov bonds (7-10 yr treasuries)

40% long term bonds (20-25 year treasuries)

7.5% gold

7.5% commodities

 

Warren Buffet

10% short term government bonds

90% in low cost S&P 500 index fund

 

Jack Bogle (Vanguard)

60% stocks (Vanguard index funds)

20% vanguard total bond market index fund

20% tax exempt municipal bond funds

2/3 vanguard intermediate tax exempt

1/3 vanguard limited term tax exempt fund

 

Charles Schwab

30% US Stocks (S&P index)

15% Real Estate Investment Trusts REITs

15% Foreign Developed Equities

15% US Treasury bonds

15% US inflation protected securities TIPS

 

Sam’s Initial Vanguard (Index Fund Asset Allocation in 2015)

Vanguard 500 Index Fund Admiral Shares (S&P 500) VFIAX – 15%

FTSE All World ex-US Small Cap Index Fund (VFSVX) – 15%

Vanguard Health Care Fund Admiral Shares (VGHAX) – 15%

Vanguard REIT Index Fund Admiral Shares (VGSLX) – 15%

Vanguard Inflation Protected Securities Fund Admiral shares (VAIPX) – 15%

Vanguard Total Bond Market Index Admiral Shares (VBTLX) – 15%

Vanguard Intermediate – Term Tax Exempt Fund Admiral Shares (VWIUX) – 10%

 

Sam’s Wealthfront (2018 Level 8 Risk Tolerance)

 

Johnny’s Vanguard Allocation

 

Johnny’s Vanguard Balance Overtime

 

Johnny’s Wealthfront Allocation

 

Time Stamps:

03:14 – What is Asset Allocation?

04:11 – Modeling portfolio

08:58 – Most basic asset allocation model

11:25 – How diversification works?

15:22 – Buy-and-Hold

17:06 – Experts buy-and-hold portfolio

21:38 – What to choose for your portfolio?

29:04 – Stocks vs. Bonds

30:26 – Definition of terms

32:43 – Tax implications

35:13 – Recommendations on how to get started

37:24 – Johnny’s wealthfront portfolio

38:05 – Sam’s wealthfront portfolio

40:11 – Wealthfront

51:23 – Sam’s investments/asset allocation

56:17 – Johnny’s investments/asset allocation

58:38 – Considerations in asset allocation model

 

If you enjoyed this episode, do us a favor and share it! Also if you haven’t already, please take a minute to leave us a 5-star review on iTunes and claim your bonus here!

Copyright 2017. All rights reserved. Read our disclaimer here.