Ideal Index Portfolio

The Ideal Index Portfolio is recommended by Frank Armstrong in his book The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio.

 

ideal-index-portfolio

Asset Allocation

Stocks

Domestic

  • 6.25% Large Cap Blend ¹
  • 9.25% Large Cap Value ¹
  • 9.25% Small Cap Value ¹
  • 6.25% Small Cap Growth ¹

International

  • 31% World Total Stock Market ²

Bonds

  • 30% Short Term Bonds

Real Assets

  • 8% REITs ³

 

Notes

1) Countries other than the United States are modeled with local regional data instead of pure domestic data for these assets.  CAN uses USA funds, while GER & UK use EUR funds.

2) The calculations assume that US investors use a World Ex-US fund while investors living in other countries use a World fund including the US.

3) The data is based on USA REITs, but a broad global REIT fund is also a reasonably close alternative if no US fund is available.