4 Portfolio Recipes That Beat 'Lazy Portfolios'

Published: October 20, 2015



We analyzed several Lazy Portfolios (e.g., static asset allocation portfolios) by running a full set of risk and return metrics.


We compared these Lazy Portfolios to over 250 other asset allocation portfolio recipes, both tactical (with dynamic reallocation) and strategic (with a fixed allocation).


Four portfolio recipes emerged as winners that consistently beat the Lazy Portfolios. These winners have lower risk and higher return over both the 1-year and 10-year time periods.


We recently received a question about the performance of the 8 "Lazy Portfolios" tracked by investment columnist Paul B. Farrell. The term "Lazy Portfolio" refers to a fixed asset allocation that is periodically rebalanced. We like to call this a "strategic portfolio recipe," but a fixed asset allocation like this can also go by several other names, such as buy-and-hold portfolio, static portfolio, or passive allocation. A strategic portfolio with a fixed allocation can be contrasted with a tactical/dynamic portfolio that changes its allocation over time.

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