Review Of Model Portfolios

What follows:

  • 19 model portfolios potentially useful as references from which to design a portfolio suitable for you
  • OWN / LOAN / RESERVE and sub-class composition
  • 1-mo, 3-mo, 1-yr, 3-yr, and 5-yr total returns
  • Trailing yield, standard deviation, Sharpe Ratio and maximum drawdown, duration of drawdown, safe withdrawal rate and perpetual withdrawal rate since 1970
  • ETFs representing each of the sub-classes used in the portfolios

These portfolios may be useful to you as starting reference points to design a portfolio best suited to you and your life stage, goals, means, limitations preferences, risk tolerance and other factors.

There are many model investment portfolios, perhaps too many, model portfolios to be found.  The could be bewildering.  This is an attempt to present a limited number of portfolios that cover the broad spectrum of investor needs and circumstances.

Before we look at them, remember that asset allocation is a far more important determination of your investment returns and portfolio volatility and periods of maximum drawdown than the specific securities you chose to represent asset categories in your portfolio.


The five steps might be best divided between long-term ideas and intermediate-term to short-term ideas (Investment Policy and Investment Strategy).

Investment Policy:

  • Decide the mixture of the three “Super Classes” OWN, LOAN and RESERVE to use in the portfolio
  • Decide which asset Sub-Classes to include and which to exclude within each super-class for the portfolio (e.g domestic or international stocks or gold or commodities or real estate in the OWN super class)
  • Decide upon the normal, or long-term, weights for each of the Super Classes, and to the Sub-Classes in the portfolio

Investment Strategy

  • Deviate from the long-term policy weights of asset classes up or down (overweight or underweight) in attempt to capture excess return, or to manage portfolio volatility, or maximum drawdown risk
  • Select individual securities or funds within an asset class to achieve superior returns relative to that asset class (expense levels are a major contributor to differences in returns for funds)

It is best to commit the Investment Policy to writing, along with other important factors such as goals, means and risk tolerance and other limitations, to serve as a reference and possible behavioral control when markets, news and situations rise your positive or negative anxiety. 

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Disclaimer: "QVM Invest”, “QVM Research” are service marks of QVM Group LLC. QVM Group LLC is a registered investment advisor.

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