Simple Path to Wealth Portfolio
The Simple Path to Wealth is a lazy portfolio proposed by JL Collins in his book The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life. The author suggests holding only one total market fund while building wealth and adding a total bond fund to the portfolio while preserving wealth.
Asset Allocation
| Position | Category/Sector | Weight |
|---|---|---|
BND Vanguard Total Bond Market ETF | Total Bond Market | 25% |
VTI Vanguard Total Stock Market ETF | Large Cap Growth Equities | 75% |
Performance
Performance Chart
The chart shows the growth of an initial investment of $10,000 in Simple Path to Wealth Portfolio, comparing it to the performance of the S&P 500 index or another benchmark. All prices have been adjusted for splits and dividends. The portfolio is rebalanced Quarterly
The earliest data available for this chart is Apr 10, 2007, corresponding to the inception date of BND
Returns By Period
As of May 18, 2024, the Simple Path to Wealth Portfolio returned 7.88% Year-To-Date and 9.82% of annualized return in the last 10 years.
| Year-To-Date | 1 month | 6 months | 1 year | 5 years (annualized) | 10 years (annualized) | |
|---|---|---|---|---|---|---|
^GSPC S&P 500 | 11.18% | 5.60% | 17.48% | 26.33% | 13.16% | 10.99% |
| Simple Path to Wealth Portfolio | 7.88% | 5.04% | 14.66% | 21.38% | 11.02% | 9.77% |
| Portfolio components: | ||||||
VTI Vanguard Total Stock Market ETF | 10.96% | 6.12% | 18.48% | 28.24% | 14.39% | 12.37% |
BND Vanguard Total Bond Market ETF | -1.21% | 1.88% | 3.44% | 2.20% | 0.12% | 1.27% |
Monthly Returns
The table below presents the monthly returns of Simple Path to Wealth Portfolio, with color gradation from worst to best to easily spot seasonal factors. Returns are adjusted for dividends.
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Total | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 0.80% | 3.65% | 2.69% | -3.86% | 7.88% | ||||||||
| 2023 | 6.02% | -2.47% | 2.69% | 0.96% | 0.03% | 5.02% | 2.72% | -1.62% | -4.23% | -2.36% | 8.18% | 4.87% | 20.74% |
| 2022 | -5.06% | -2.14% | 1.70% | -7.83% | 0.03% | -6.52% | 7.59% | -3.50% | -8.01% | 5.78% | 4.82% | -4.68% | -17.80% |
| 2021 | -0.47% | 1.98% | 2.46% | 4.00% | 0.38% | 2.10% | 1.59% | 2.10% | -3.62% | 5.02% | -1.06% | 2.76% | 18.32% |
| 2020 | 0.45% | -5.55% | -10.51% | 10.53% | 4.29% | 1.90% | 4.68% | 5.18% | -2.78% | -1.60% | 9.15% | 3.58% | 18.74% |
| 2019 | 6.69% | 2.70% | 1.52% | 2.94% | -4.45% | 5.58% | 1.10% | -0.89% | 1.18% | 1.66% | 2.85% | 2.11% | 25.03% |
| 2018 | 3.61% | -3.11% | -1.31% | 0.13% | 2.22% | 0.52% | 2.48% | 2.76% | 0.02% | -5.77% | 1.65% | -6.28% | -3.63% |
| 2017 | 1.44% | 2.93% | 0.03% | 1.00% | 0.94% | 0.72% | 1.51% | 0.32% | 1.72% | 1.62% | 2.26% | 1.02% | 16.62% |
| 2016 | -3.98% | 0.22% | 5.44% | 0.59% | 1.30% | 0.71% | 3.14% | 0.08% | 0.17% | -1.88% | 2.72% | 1.60% | 10.26% |
| 2015 | -1.44% | 3.90% | -0.74% | 0.38% | 0.85% | -1.54% | 1.50% | -4.64% | -1.92% | 5.97% | 0.37% | -1.65% | 0.59% |
| 2014 | -1.99% | 3.73% | 0.34% | 0.25% | 1.84% | 1.99% | -1.57% | 3.39% | -1.72% | 2.24% | 2.07% | -0.01% | 10.86% |
| 2013 | 3.91% | 1.11% | 3.03% | 1.46% | 1.36% | -1.48% | 4.40% | -2.51% | 3.22% | 3.41% | 1.97% | 1.92% | 23.83% |
Expense Ratio
Simple Path to Wealth Portfolio has an expense ratio of 0.03% which is considered to be low. Below you can find the expense ratios of portfolio funds side-by-side and effortlessly compare their relative costs.
Risk-Adjusted Performance
Risk-Adjusted Performance Rank
The current rank of Simple Path to Wealth Portfolio is 52, suggesting that the investment has average results relative to other portfolios in terms of risk-adjusted performance. This ranking is determined by the cumulative values of the indicators listed below.
Simple Path to Wealth Portfolio
Risk-Adjusted Performance Indicators
This table presents a comparison of risk-adjusted performance metrics for positions. Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
| Sharpe ratio | Sortino ratio | Omega ratio | Calmar ratio | Martin ratio | |
|---|---|---|---|---|---|
VTI Vanguard Total Stock Market ETF | 2.46 | 3.44 | 1.42 | 2.05 | 9.15 |
BND Vanguard Total Bond Market ETF | 0.23 | 0.37 | 1.04 | 0.08 | 0.65 |
Dividends
Dividend yield
Simple Path to Wealth Portfolio granted a 1.85% dividend yield in the last twelve months.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Simple Path to Wealth Portfolio | 1.85% | 1.85% | 1.90% | 1.40% | 1.62% | 2.01% | 2.23% | 1.92% | 2.07% | 2.13% | 2.02% | 2.00% |
| Portfolio components: | ||||||||||||
VTI Vanguard Total Stock Market ETF | 1.35% | 1.44% | 1.66% | 1.21% | 1.42% | 1.78% | 2.04% | 1.71% | 1.92% | 1.98% | 1.76% | 1.74% |
BND Vanguard Total Bond Market ETF | 3.36% | 3.09% | 2.60% | 1.97% | 2.22% | 2.72% | 2.81% | 2.54% | 2.51% | 2.57% | 2.79% | 2.78% |
Drawdowns
Drawdowns Chart
The Drawdowns chart displays portfolio losses from any high point along the way.
Worst Drawdowns
The table below displays the maximum drawdowns of the Simple Path to Wealth Portfolio. A maximum drawdown is a measure of risk, indicating the largest reduction in portfolio value due to a series of losing trades.
The maximum drawdown for the Simple Path to Wealth Portfolio was 43.49%, occurring on Mar 9, 2009. Recovery took 467 trading sessions.
The current Simple Path to Wealth Portfolio drawdown is 0.20%.
Depth | Start | To Bottom | Bottom | To Recover | End | Total |
|---|---|---|---|---|---|---|
| -43.49% | Oct 10, 2007 | 355 | Mar 9, 2009 | 467 | Jan 12, 2011 | 822 |
| -26.82% | Feb 20, 2020 | 23 | Mar 23, 2020 | 92 | Aug 3, 2020 | 115 |
| -22.92% | Dec 28, 2021 | 202 | Oct 14, 2022 | 320 | Jan 25, 2024 | 522 |
| -14.75% | Sep 21, 2018 | 65 | Dec 24, 2018 | 66 | Apr 1, 2019 | 131 |
| -14.37% | Jul 8, 2011 | 61 | Oct 3, 2011 | 78 | Jan 25, 2012 | 139 |
Volatility
Volatility Chart
The current Simple Path to Wealth Portfolio volatility is 2.79%, representing the average percentage change in the investments's value, either up or down over the past month. The chart below shows the rolling one-month volatility.
Diversification
Asset Correlations Table
| BND | VTI | |
|---|---|---|
| BND | 1.00 | -0.17 |
| VTI | -0.17 | 1.00 |