Paul Merriman 70-30 Portfolio Setup

Investing
#1

Hey everybody,

I wanted to know everyone’s thoughts on this portfolio set-up it is similar to a total stock market index, but with some int’l exposure (I would probably drop it to 10% and reallocated the rest to U.S.), Bogleheads don’t kill me. But I wanted to know your opinion on investing directly into funds instead of just an S&P500 or Total Market index. The returns long term seem better, I am 19, so I expect to buy and hold. Are there any issues with this portfolio that maybe I am not seeing?

I am simplifying my strategy from my last post, but is this still too complex. I want to give myself decent diversification (volatility does not bother me, as I intend to hold forever), but I want as good returns as possible (like everyone).

Thanks!

#2

I tend to look at portfolio’s like this as “it’s easy to get something to work with the benefit of hindsight”. i.e. Over the period described in your attachment, the market returned about 10%, and he found these other portfolios with additional weight given to smaller sectors that returned up to 12%. Maybe when he was researching, he also found a bunch of portfolios that overweighted other sectors that returned 8%. He put a circle around the winners, and declared victory, and published the results.

But what’s going to happen going forward? Will that same (kinda complex) 10 fund portfolio still outperform? I don’t know. I doubt it.

Jack Bogle would claim you’re just opening yourself up to underperformance by picking sectors like that.

But, I’m just a dude. I haven’t done as much research as Paul Merriman. I can only relate what I have learned from reading the books of experts, and I think that is the critique they would make.

Although, as always, if you follow the two rules you’ll be in good shape. If you do nothing but live below your means and buy the four funds in his final portfolio described there, you will do great. :slight_smile: