In this post I am going to provide a list of websites that provide investors with suggestions for a well-diversified portfolio. However, before I present the list I need to temper anyone’s desire to simply take these suggested portfolios and implement them. Not one of these portfolios is a good fit for everyone, even if the sites they come from suggest that they are! More importantly, if you are going to be a do-it-yourself dividend investor, then it is crucial that you understand why each and every asset in your portfolio is there and by simply following some suggested portfolio you defeat the purpose of being an individual investor. You would be better suited to find a financial planner (fee-only of course) and let them help you build a portfolio. That being said, I think the following list of sites and portfolios is the cream-of-the-crop on the web.
I use sites and portfolio suggestions like these in two ways. First, I use them to learn about and understand the various approaches investors take on the topic of asset allocation. Since I already have a strong asset allocation, I am using it for more of a verification of my asset allocation and to see if there is anything I am missing. If you don’t have an asset allocation, then these lists can provide a good introduction to what good asset allocations look like. Second, I also use them to get an idea of the assets that different investors use to fill-out their own asset allocations. There are thousands of choices for investments, and getting some perspective on what other experts like helps me save time. Again, I do not blindly buy the assets on their lists. I compare my asset allocation and see if the asset selections would fit into my own portfolio.
So what are the site and lists that I like? Take a visit to each of the sites below – I think you will find it both valuable and educational:
This site has one of the more extensive list of suggested portfolios. It is from the makers of the Sound Investing podcast which I listen to religiously and really emphasizes using index funds to build a portfolio. The portfolio that I learned the most from and have actually used some suggestions from it is the ETF Balanced portfolio.
Click here to visit FundAdvice’s suggested portfolios.
Couch Potato Portfolio
This one takes a bit of work as you need to go through a survey to figure out what type of investor you are and what your goals are. However, at the end you get a real good picture of some suggested portfolios and their corresponding asset allocations. Keep in mind that there is a service tied to this website – they want you to sign up to implement their suggestions through their site.
Click here is visit the AssetBuilder tool.
The Intelligent Asset Allocator
When I was thinking of the best way to present the material from William Bernstein’s book of the same title, I was at a loss because I couldn’t find any material on his website that presented the materials in his book in a easy to use manner. However, I did get luck and ran across My Money Blog’s post on model portfolios and he did an excellent job of defining the book’s overall approach. He also included one of the model portfolios presented.
That should give you a good list to start with. As I am always on the hunt for suggested or model portfolios, please be sure to let me know using the comments below.
(Photo Credit: Drouu)