Core Four Portfolio

The Core Four Portfolio by Rick Ferri invests in four fundamentally unique asset types that are productive both on their own and as a group.

Asset Allocation


  • 48% Total Stock Market
  • 24% International Stocks
  • 20% Intermediate Bonds
  • 8% REITs
Other Versions

Rick Ferri offers several different versions of the Core Four Portfolio depending on your needs and preferences. The one described here is the original version that he now calls the Classic Core-4. A few other versions can be easily modeled as well:

Total Economy Core-4

Global Markets Core-4

Local Interpretations

Find country-specific versions and appropriate ETFs using the Performance charts.

Author


<strong>Rick Ferri</strong>
Rick Ferri

Rick Ferri is a financial adviser and investing author. You can read about the Core Four portfolio at Core-4.com, and learn about his investing philosophy in his book All About Asset Allocation.

Overview


Rick Ferri has long been a vocal champion of low-cost DIY investing, and the Core Four Portfolio represents his best advice for people who want to escape high fees and complex asset allocations. In his own words:

Simple investing is a virtue – the ultimate in portfolio sophistication. A few low-cost, broadly diversified index funds or ETFs held in a portfolio will beat complex strategies almost every time. Why waste your time and money on complexity? Be simple and be rewarded.

The four assets in the Core Four are selected based on the following characteristics:

  1. All have an economic purpose that is fundamentally different from each other.
  2. All produce regular cash-flow from interest, dividends or rents.
  3. The historic correlations between asset classes have resulted in a diversification benefit.
  4. All asset classes can be purchased using a very-low cost index fund or ETF.

A notable part of Ferri’s philosophy is evident in the juxtaposition of points 2 and 3. While some portfolios select assets primarily for how they affect overall performance as a group, Ferri believes that they should also stand on their own with regular cash-flow.

The Core Four Portfolio does a nice job of distilling several similar portfolios down to their simplest form, and is a good choice for investors seeking a solid financial foundation with low fees and minimum complexity.

Articles


Insights that mention the Core Four Portfolio

Alternatives


Portfolios with a similar structure or design intent

Ideal Index Portfolio — Similar structure with a few more stock funds

No-Brainer Portfolio — Shares a common philosophy with a different 4th fund

Pinwheel Portfolio — Builds on the Core-4 assets with performance-augmenting tweaks

Performance


Change the home country to translate the portfolio to local assets, currency, and inflation.