{"id":26579,"date":"2022-05-17T16:37:12","date_gmt":"2022-05-17T20:37:12","guid":{"rendered":"https:\/\/www.moneysense.ca\/?p=262499"},"modified":"2022-05-17T16:37:12","modified_gmt":"2022-05-17T20:37:12","slug":"performance-the-ultimate-couch-potato-portfolio-guide","status":"publish","type":"post","link":"https:\/\/blog.andrewwbradley.ca\/index.php\/2022\/05\/17\/performance-the-ultimate-couch-potato-portfolio-guide\/","title":{"rendered":"Performance: The Ultimate Couch Potato Portfolio Guide"},"content":{"rendered":"

Core vs. advanced couch potato <\/h2>\n

So, how do these portfolios stack up against each other? Here\u2019s the near-term comparison of balanced portfolio models, core versus advanced. <\/p>\n

Source: portfoliovisualizer.com <\/figcaption><\/figure>\n

The BMO Balanced model is flat at the beginning of 2021, while the advanced balanced model delivered 5.2% in cumulative return for the period. <\/p>\n

If we look back to 2015, we\u2019ll find that the core model outperforms. (I\u2019ve substituted for long-term treasuries to create the chart with an approximation.)<\/p>\n

Source: portfoliovisualizer.com <\/figcaption><\/figure>\n

Over the long run, the BMO Balanced portfolio delivered an annual return of 7.0%, versus 6.5% for the advanced model. We would expect the core model to outperform in a disinflationary period, or when inflation is mostly under control. If we remain in an inflationary or stagflationary environment, the advanced couch potato model should greatly outperform the core portfolio. <\/p>\n

All that said, there is often very little cost to adding that inflation protection, according to what I see in my research. And in most periods between the 1970s and now, adding gold, commodities and REITs will increase the performance of a balanced portfolio. <\/p>\n

See the chart below for how a 60\/40 U.S. balanced portfolio looks against a balanced portfolio with 20% bonds and 20% gold. The commodities allocation is not available on Portfolio Visualizer from 1972, so I used gold as the inflation-fighter. Gold is also known as a \u201csafe haven asset,\u201d and it typically performs well when stock markets correct in aggressive fashion. <\/p>\n

Source: portfoliovisualizer.com <\/figcaption><\/figure>\n

The balanced portfolio with gold outperforms the traditional balanced model by 0.50% annually. In the above chart, the balanced portfolio consists of 60% U.S. stocks and 40% U.S. bonds. The balanced portfolio with gold has 60% U.S. stocks, 20% U.S. bonds and 20% gold. <\/p>\n

Once again, whether or not to add gold and commodities is a personal call for the self-directed investor. <\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Core vs. advanced couch potato  So, how do these portfolios stack up against each other? Here\u2019s the near-term comparison of balanced portfolio models, core versus advanced.  Source: portfoliovisualizer.com  The BMO Balanced model is flat...<\/p>\n","protected":false},"author":1,"featured_media":24127,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[7,10],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/26579"}],"collection":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/comments?post=26579"}],"version-history":[{"count":0,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/26579\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media\/24127"}],"wp:attachment":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media?parent=26579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/categories?post=26579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/tags?post=26579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}