No-Brainer Portfolio

The No-Brainer Portfolio by William Bernstein is a simple and straightforward approach to asset, region, and factor diversification that accomplishes all three in just four assets.

Asset Allocation
Performance
Author
Overview
Articles
Books
Discussion
Alternatives

Asset Allocation

%	Asset Class
25%	Large Cap Blend Stocks
25%	Small Cap Blend Stocks
25%	International Large Cap Blend Stocks
25%	Short Term Bonds

Other Versions

While they’re not all direct iterations of the No-Brainer Portfolio, Bernstein talks about all types of asset allocations in his writings. Here are just a few examples, and you can also model any version you like using the Charts.

Four Pillars Medium — Expanding the No-Brainer into value factors and real estate

Coward’s Portfolio — A modest proposal for a naive allocation that beats the experts

Sheltered Sam 60-40 — A unique portfolio designed for a specific investing persona

Performance

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

Portfolio Charts

Author

William Bernstein

William Bernstein is a neurologist and financial author who writes prolifically on asset allocation. You can read his thoughts on the No-Brainer Portfolio in his book The Intelligent Asset Allocator.

Overview

The No-Brainer Portfolio, also sometimes called the Simpleton’s Portfolio, is an interesting study in asset allocation. Bernstein is a self-described “asset junkie” who enjoys discussing all types of increasingly sophisticated portfolios custom designed for unique investor needs and fine-tuned with advanced concepts like efficient frontiers. While the No-Brainer Portfolio is just the simplest introductory idea in The Intelligent Asset Allocator, I also think it uniquely expresses some of his most fundamental insights.

Bernstein tends to talk about his ideas self-deprecatingly in terms of naive but effective diversification, but the thing I find most interesting is how the No-Brainer Portfolio tackles three different types of diversification in the most efficient way possible. By adding small cap stocks, international stocks, and short term bonds to a traditional large cap stock fund, it demonstrates how easy it is to construct a well-considered asset allocation that doesn’t depend so much on the handful of large cap companies that tend to dominate stock returns. For a lot of people looking for maximum diversification with minimum effort, that really is a no-brainer.