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Simple Path to Wealth Portfolio

Last updated Aug 13, 2022

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 10 of 54

0.03%
0.00%0.94%
Dividend Yield

Rank 34 of 54

1.63%
0.00%4.34%
10Y Annualized Return

Rank 15 of 54

11.77%
4.13%64.70%
Sharpe Ratio

Rank 15 of 54

-0.29
-0.980.14
Maximum Drawdown

Rank 30 of 54

-31.05%
-91.88%-17.74%

Simple Path to Wealth PortfolioAsset Allocation


BND 25%VTI 75%BondBondEquityEquity

Simple Path to Wealth PortfolioPerformance

The chart shows the growth of $10,000 invested in Simple Path to Wealth Portfolio in Jan 2010 and compares it to the S&P 500 index or another benchmark. It would be worth nearly $36,018 for a total return of roughly 260.18%. All prices are adjusted for splits and dividends. The portfolio is rebalanced Quarterly


-15.00%-10.00%-5.00%0.00%5.00%MarchAprilMayJuneJulyAugust
-2.93%
-2.76%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Simple Path to Wealth PortfolioReturns

As of Aug 13, 2022, the Simple Path to Wealth Portfolio returned -10.20% Year-To-Date and 11.77% of annualized return in the last 10 years.


1M6MYTD1Y5Y10Y
Benchmark12.08%-4.97%-10.20%-3.65%11.89%11.81%
Simple Path to Wealth Portfolio9.96%-4.58%-9.71%-5.81%10.58%10.81%
VTI
Vanguard Total Stock Market ETF
12.82%-4.78%-10.34%-4.99%13.37%13.68%
BND
Vanguard Total Bond Market ETF
1.49%-4.92%-8.75%-9.37%0.97%1.54%

Simple Path to Wealth PortfolioSharpe 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 -0.29. 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.


-1.00-0.500.000.501.00MarchAprilMayJuneJulyAugust
-0.37
-0.20
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Simple Path to Wealth PortfolioDividends

Simple Path to Wealth Portfolio granted a 1.63% dividend yield in the last twelve months.


PeriodTTM202120202019201820172016201520142013201220112010

Dividend yield

1.63%1.42%1.66%2.10%2.38%2.09%2.30%2.42%2.35%2.39%2.93%2.92%2.98%

Simple Path to Wealth PortfolioDrawdowns Chart

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


-20.00%-15.00%-10.00%-5.00%0.00%SeptemberOctoberNovemberDecember2022FebruaryMarchAprilMayJuneJulyAugust
-10.17%
-10.77%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

Simple Path to Wealth PortfolioWorst 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 26.82%, recorded on Mar 23, 2020. It took 92 trading sessions for the portfolio to recover.


Depth

Start

To Bottom

Bottom

To Recover

End

Total

-26.82%Feb 20, 202023Mar 23, 202092Aug 3, 2020115
-21.19%Dec 28, 2021119Jun 16, 2022
-14.75%Sep 21, 201865Dec 24, 201866Apr 1, 2019131
-14.37%Jul 8, 201161Oct 3, 201178Jan 25, 2012139
-11.57%Apr 26, 201049Jul 2, 201074Oct 18, 2010123
-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
-5.88%Jan 20, 201014Feb 8, 201018Mar 5, 201032

Simple Path to Wealth PortfolioVolatility Chart

Current Simple Path to Wealth Portfolio volatility is 10.32%. 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%40.00%MarchAprilMayJuneJulyAugust
14.57%
16.68%
Simple Path to Wealth Portfolio
Benchmark (^GSPC)
Portfolio components

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