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What is the Coffeehouse Portfolio?
The Bill Schultheis’ Coffeehouse Portfolio can be built with 7 ETFs. It is exposed to between 60% equities and 40% bonds.
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How do you build the Coffeehouse portfolio with ETFs?
Here is how you build the Coffeehouse portfolios with ETFs
- 10.00% US Large Cap Value (VTV)
- 10.00% US Large Cap (VOO)
- 10.00% US Small Cap Value (VIOV)
- 10.00% US Small Cap (VIOO)
- 10.00% REITs (VNQ)
- 10.00% International All-World ex-US (VEU)
- 40.00% Total US Bond Market (BND)
What is the historical return of the Coffeehouse Portfolio?
Below you can see the return of the Coffeehouse portfolio.
Portfolio data was last updated on 1st of June 2023, 06:35 ET
| Name | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| Bill Schultheis Coffeehouse Portfolio | 0.61 | -14.22 | 6.21 | 8.08 | -20.14 | 0.07% | 2.42 |
| Coffeehouse Three ETF | 4.61 | -12.67 | 5.78 | 7.23 | -25.37 | 0.15% | 2.69 |
Here is what the table is showing you
Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.
10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.
CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.
Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.
Yield: This is the expected dividend yield of the portfolio.
Please note that past performance is not a guarantee of future returns.
How does Bill Schultheis Coffeehouse portfolio compare to the best portfolios?
| Name | See Portfolio | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Premium Portfolio |  | -1.07 | -18.03 | 9.46 | 10.8 | -35.42 |
| Premium Portfolio | | 0.13 | -11.98 | 11.25 | 10.38 | -35.26 |
| Premium Portfolio | | 9.69 | -18.19 | 12.52 | 10.28 | -37.63 |
| Premium Portfolio | | -2.2 | -13.08 | 8.28 | 10.2 | -36.46 |
| Premium Portfolio | | 3.96 | -18.75 | 7.0 | 10.19 | -44.88 |
| Premium Portfolio | | 8.81 | -19.51 | 12.08 | 10.19 | -37.0 |
| Premium Portfolio | | -3.94 | -13.91 | 9.7 | 10.16 | -40.85 |
| Premium Portfolio | | -2.05 | -13.22 | 8.31 | 10.08 | -36.35 |
| Premium Portfolio | | 1.4 | -16.94 | 7.59 | 9.99 | -37.91 |
| Premium Portfolio | | 8.04 | -18.87 | 11.03 | 9.84 | -32.78 |
Who is Bill Schultheis?
Bill Schultheis is a financial adviser and co-founder of the wealth management firm Soundmark Wealth Management. He authored the famous book The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life.
We consider him to be one of the good guys in investing. He focuses on the Long-Term, low cost, and, most importantly, doing the right thing for his clients.
“The simplest approach to diversifying your stock market investments is to invest in one index fund that represents the entire stock market.”
– Bill Schultheis
Bill Schultheis presents his Coffeehouse portfolio in his book,The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life. It has been featured in The New York Times, The Wall Street Journal, TIME magazine, and Marketwatch.com
Bill Schultheis' - The Coffeehouse Portfolio
His website describes the use of the investment portfolio.
Bill Schultheis stresses that to be successfulat investing, you need to:
- Save money
- Diversifyyour investments
- Use low-cost index funds.
The index portfolio is a variation on the 60/40 investment portfolio, with the stock portion sliced up into smaller allocations.
What is the asset allocation piechart for Bill Schultheis’ Coffeehouse portfolio?
Here you can see how Bill Schultheis' Coffeehouse Portfolio look like in a piechart.
Bill Schultheis' - The Coffeehouse Portfolio
What is the simpler Coffeehouse portfolio?
Bill Schultheis' displays an even simpler portfolio on his site. This is shown below.
ETF allocation for the Three ETF Coffeehouse portfolio
- 33.33% Total US Stock Market (VTI)
- 33.33% International Value Stocks (EFV)
- 33.33% Total US Bond Market (BND)
What are the advantages and disadvantages of the Coffeehouse portfolio?
Here are the advantages of the Coffeehouse portfolio
- Bill Schultheis’ investment portfolio allocates 20% to value-stocks. Value stocks have historically outperformed growth stocks.
- The portfolio has 20% allocated to small-caps, historically small-caps have outperformed large-cap stocks.
- The Coffeehouse portfolio is a “sleep-well” portfolio. It is less risky than the overall market due to its 40% bond allocation.
- The portfolio has excellent diversification within the U.S.
- Bill Schultheis represents one of the good guys investing.
Here are the disadvantages of the Coffeehouse portfolio
- The investment portfolio may not have enough international exposure. It only has 10%. This may not be a problem for you. John Bogle is famous for not allocating to foreign stocks.
- Rebalancing of the portfolio could be expensive due to the many funds you need to juggle around every year. This chould not be an issue however as a lot of brokers including Vanguard and Schwab, have removed commissions on stocks and ETFs.
- The 40% bond allocation can drag on your returns.
Where can I learn more about the Coffeehouse portfolio?
Bill Schultheis’ YouTube channel.
Bill Schultheis has a very informative Coffeehouse website that he updates regularly.
His wealth management firm is called Soundmark.
His book The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life
Suggestions for your next steps
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If you have already committed to a portfolio then maybe you need help maintaining the portfolio. In this case you will find our rebalance worksheet useful.
Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.
You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.
