The Balanced Portfolio
Try out the TNF Asset Mix Calculator. Unlike the generalized retirement planning calculators offered by other financial web sites, the TNF tool lets you work directly with the assets classes and see for yourself how various asset allocations have performed over the years. It includes indices for stocks, bonds, gold, commodities, reits, and even the historical returns on residential housing.
Below are two pdf report files created using the calculator. They show how the Balanced Portfolio compares to bonds and the S&P500.
Balanced vs Bonds
Balanced vs SP500
The portfolio is totally passive and the returns below assume there was no market timing and assets were reallocated each year to the recommended proportions.
Annual Returns of the TNF Balanced Portfolio - 1982 to 2005
82 |
83 |
84 |
85 |
86 |
87 |
88 |
89 |
90 |
91 |
92 |
93 |
19.0 |
18.9 |
8.2 |
26.8 |
21.4 |
8.9 |
17.5 |
14.8 |
-2.1 |
19.0 |
7.8 |
15.3 |
94 |
95 |
96 |
97 |
98 |
99 |
00 |
01 |
02 |
03 |
04 |
05 |
1.3 |
20.1 |
14.1 |
15.7 |
6.2 |
7.9 |
7.8 |
0.4 |
-2.3 |
24.4 |
12.9 |
8.0 |
We advise that you invest the majority of your money in a self directed asset allocation strategy and avoid over-concentration of capital. This is the key to wealth building and financial peace of mind. A proper portfolio will protect your assets from ignorance, crashes, and reckless speculation. The Balanced Portfolio isn't the only way to asset allocate but it does work very well.
The Balanced Portfolio uses mostly low cost Vanguard index funds. You don't need to pay an advisor 1-2% of your assets every year or pay high fees to financial services firms. Our Balanced Portfolio is totally no-load and has half the stock market risk of the S&P500.
Since 1970 it’s largest yearly loss has been 4% in 1974.
Average Annual Returns as of 12/31/05
Since 1982: 12.2%
20 Yrs: 11.0%
10 Yrs: 9.5%
5 Yrs: 8.7%
Why worry about the market - get invested and then spend your time on what
you enjoy.
The TNF Balanced Portfolio
Vanguard Total International Stock Index Fund (VGTSX) – 15%
Vanguard 500 Index Fund (VFINX) – 15%
Vanguard Small Cap Value Index (VISVX) – 15%
Commodities (PCRIX) - 10% (optional: 10% (GLD)/Gold Coins)
Vanguard Total Bond Market Index Fund (VBMFX) – 30%
Vanguard REIT Index (VGSIX) - 10%
Money Market – 5%
(Stock and Bond market returns within the portfolio can be significantly enhanced using our market timing strategies.)
In July 2006, we eliminated foreign bonds and shifted that allocation to real estate investment trusts. REITs don't correlate closely with bonds and provide a higher level of income. Short Term Bonds were eliminated and that allocation was shifted to a money market. The old mix of assets was previously called the Global Portfolio.