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
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
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 month | Year-To-Date | 6 months | 1 year | 5 years (annualized) | 10 years (annualized) | |
|---|---|---|---|---|---|---|
| Benchmark | 3.51% | 7.03% | 12.88% | -10.71% | 9.25% | 10.16% |
| Simple Path to Wealth Portfolio | 2.70% | 6.20% | 11.03% | -8.64% | 8.33% | 9.30% |
| Portfolio components: | ||||||
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% |
| Returns over 1 year are annualized | ||||||
Dividends
Simple Path to Wealth Portfolio granted a 2.21% dividend yield in the last twelve months.
| Period | TTM | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
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.
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, 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 | — | — | — |
| -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 |
| -10.63% | May 22, 2015 | 183 | Feb 11, 2016 | 46 | Apr 19, 2016 | 229 |
| -7.76% | Jan 29, 2018 | 9 | Feb 8, 2018 | 115 | Jul 25, 2018 | 124 |
| -7.25% | Sep 3, 2020 | 14 | Sep 23, 2020 | 33 | Nov 9, 2020 | 47 |
| -7.04% | Apr 3, 2012 | 43 | Jun 4, 2012 | 48 | Aug 10, 2012 | 91 |
| -6.82% | Jul 17, 2007 | 22 | Aug 15, 2007 | 32 | Oct 1, 2007 | 54 |
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.