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Simple Path to Wealth Portfolio

Last updated Apr 1, 2023

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.

Expense Ratio

Rank 11 of 55

0.03%
0.00%0.94%
Dividend Yield

Rank 32 of 55

2.21%
0.00%4.33%
10Y Annualized Return

Rank 16 of 55

9.30%
2.63%52.97%
Sharpe Ratio

Rank 31 of 55

-0.46
-0.930.49
Maximum Drawdown

Rank 34 of 55

-43.49%
-82.98%-16.15%

Asset Allocation


BND 25%VTI 75%BondBondEquityEquity

Performance

The chart shows the growth of $10,000 invested in Simple Path to Wealth Portfolio in Oct 2022 and compares it to the S&P 500 index or another benchmark. It would be worth nearly $32,441 for a total return of roughly 224.41%. All prices are adjusted for splits and dividends. The portfolio is rebalanced Quarterly


140.00%160.00%180.00%200.00%220.00%240.00%NovemberDecember2023FebruaryMarch
224.41%
183.72%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Returns

As of Apr 1, 2023, the Simple Path to Wealth Portfolio returned 6.20% Year-To-Date and 9.30% of annualized return in the last 10 years.


1 monthYear-To-Date6 months1 year5 years (annualized)10 years (annualized)
Benchmark3.51%7.03%12.88%-10.71%9.25%10.16%
Simple Path to Wealth Portfolio2.70%6.20%11.03%-8.64%8.33%9.30%
VTI
Vanguard Total Stock Market ETF
2.71%7.18%13.17%-10.19%10.36%11.75%
BND
Vanguard Total Bond Market ETF
2.68%3.25%4.69%-4.65%0.87%1.29%

Sharpe Ratio Chart

The Sharpe ratio shows whether the portfolio's excess returns are due to smart investment decisions or a result of taking a higher risk. The higher a portfolio's Sharpe ratio, the better its risk-adjusted performance.

The current Simple Path to Wealth Portfolio Sharpe ratio is -0.46. A negative Sharpe ratio means that the risk-free rate is higher than the portfolio's return. This value does not convey any meaningful information.

The chart below displays rolling 12-month Sharpe Ratio.


-1.00-0.80-0.60-0.40-0.20NovemberDecember2023FebruaryMarch
-0.46
-0.46
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Dividends

Simple Path to Wealth Portfolio granted a 2.21% dividend yield in the last twelve months.


PeriodTTM20222021202020192018201720162015201420132012

Dividend yield

2.21%1.91%1.44%1.68%2.13%2.42%2.12%2.34%2.46%2.38%2.42%2.97%

Drawdowns Chart

The Drawdowns chart displays portfolio losses from any high point along the way.


-25.00%-20.00%-15.00%-10.00%NovemberDecember2023FebruaryMarch
-13.15%
-14.33%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Worst Drawdowns

The table below shows the maximum drawdowns of the Simple Path to Wealth Portfolio. A maximum drawdown is an indicator of risk. It shows a reduction in portfolio value from its maximum due to a series of losing trades.

The maximum drawdown since January 2010 for the Simple Path to Wealth Portfolio is 43.49%, recorded on Mar 9, 2009. It took 467 trading sessions for the portfolio to recover.


Depth

Start

To Bottom

Bottom

To Recover

End

Total

-43.49%Oct 10, 2007355Mar 9, 2009467Jan 12, 2011822
-26.82%Feb 20, 202023Mar 23, 202092Aug 3, 2020115
-22.92%Dec 28, 2021202Oct 14, 2022
-14.75%Sep 21, 201865Dec 24, 201866Apr 1, 2019131
-14.37%Jul 8, 201161Oct 3, 201178Jan 25, 2012139
-10.63%May 22, 2015183Feb 11, 201646Apr 19, 2016229
-7.76%Jan 29, 20189Feb 8, 2018115Jul 25, 2018124
-7.25%Sep 3, 202014Sep 23, 202033Nov 9, 202047
-7.04%Apr 3, 201243Jun 4, 201248Aug 10, 201291
-6.82%Jul 17, 200722Aug 15, 200732Oct 1, 200754

Volatility Chart

Current Simple Path to Wealth Portfolio volatility is 8.57%. The chart below shows the rolling 10-day volatility. Volatility is a statistical measure showing how big price swings are in either direction. The higher asset volatility, the riskier it is, because the price movements are less predictable.


10.00%15.00%20.00%25.00%30.00%35.00%NovemberDecember2023FebruaryMarch
11.78%
15.42%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components