Comparison - Lazy Portfolio ETF (2024)

FAQs

Which lazy portfolio is best? ›

Rick Ferri's Two-Fund Lazy Portfolio

The 60/40 rule of asset allocation is a tried-and-true rule of thumb for approaching your portfolio. And it's ludicrously simple: 60% stocks. 40% bonds.

This investment strategy seeks total return through exposure to a diversified portfolio of primarily equity, and to a lesser extent, Fixed Income asset classes with a target allocation of 60% equities and 40% Fixed Income. Target allocations can vary +/-5%.

It's important to note that both the 60/40 and 70/30 asset allocations are considered moderately risky. But the exact amount of risk you are comfortable with will depend on your specific needs and goals.

The primary difference between VTI and VOO is that the VTI portfolio replicates the performance of the entire U.S. stock market, including small-caps and mid-caps, while VOO primarily holds large-caps.

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

Specifically, a fund is prohibited from: acquiring more than 3% of a registered investment company's shares (the “3% Limit”); investing more than 5% of its assets in a single registered investment company (the “5% Limit”); or. investing more than 10% of its assets in registered investment companies (the “10% Limit”).

What is the 4% rule for ETF? ›

The 4% rule says people should withdraw 4% of their retirement funds in the first year after retiring and take that dollar amount, adjusted for inflation, every year after. The rule seeks to establish a steady and safe income stream that will meet a retiree's current and future financial needs.

ETFs based on global stock indexes can be used to create a 70/30 portfolio. These ETFs are broadly diversified and aim to replicate the global stock market. According to the 70/30 rule, you would use an ETF to invest 70 percent of your capital in developed countries, and 30 percent in emerging markets.

ETFs offer portfolio diversification, but not every investor needs multiple ETFs. A single ETF can move you closer to your financial goals and can complement a portfolio of individual stocks. Knowing your long-term goals and what you need now can help you decide on the right ETF and stocks for your portfolio.

The efficient portfolios are those that have the highest expected return for a given standard deviation value. These portfolios are the green dots starting with the global minimum variance portfolio at the tip of the Markowitz bullet.

Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.

A good way to minimize risk is by creating a diversified and balanced portfolio with stocks, bonds, and cash that aligns with your short- and long-term goals. From there, you can broaden your portfolio to include other assets like real estate or high-risk investments for an increased likelihood of higher returns.