In the simplest form the portfolio consists of 4 assets at 25%. These are:
- Total Stock Market (VTI) - 25%
- Gold (GLD or IAU) - 25%
- Cash (can be replaced by Short Term Treasury - SHV or SHY) - 25%
- Long Term Treasury (TLT) - 25%
If you want to learn more you can read more at http://crawlingroad.com/blog/ and follow the discussion at http://gyroscopicinvesting.com/forum/index.php.
Another strategy I am interested in is the Fat Tail minimization by Larry Swedroe. The assets in the portfolio are:
- Small Cap Value (VBR/IWN) - 15%
- Emerging Market (VWO/EEM) - 15%
- Inflation Protected Treasury (TIP) - 35%
- Short Term Treasury (SHY) - 35%
Both these strategies are expected to provide returns with low volatility. Fat Tail Minimization is equivalent to traditional 30/70 portfolio but the stock portion has relatively higher risk and bond portion has relatively lower risk (does not include corporate bonds).
Over the next few posts I will outline various flavors of the above strategy and documenting my results. Once I have described various portfolios I plan on updating the results every month.