Here Are The 20 Best Income Portfolios Built with ETFs for 2023
If you're looking for income then you should look at this list of the 20 best income portfolios.
Is the All-Weather portfolio by Tony Robbins and Ray Dalio better than the Permanent portfolio?
The All-Weather portfolio by Ray Dalio and Tony Robbins has had a higher compound annual return than Harry Browne’s Permanent portfolio since 1989.
From a return perspective, this makes the All-Weather portfolio better.
The All-Weather portfolio experienced a higher drawdown than the Permanent portfolio.
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So which portfolio is best, the All-Weather portfolio by Ray Dalio and Tony Robbins or The Permanent portfolio?
First off, both portfolios are excellent at weathering most economic storms. Both the All-Weather and the Permanent portfolios have seen multiple boom and bust cycles and have fared extremely well. ## What is the historical return of the All-Weather and the Permanent portfolio? Here is the historical return of the All-Weather and the Permanent portfolio.
Portfolio data was last updated on 11th of August 2023, 08:35 ET
| Name | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| The Permanent Portfolio | 3.7 | -12.5 | 3.97 | 6.52 | -12.5 | 0.14% | 1.5 |
| Tony Robbins / Ray Dalio Portfolio | 2.95 | -18.53 | 4.32 | 7.71 | -18.53 | 0.16% | 1.88 |
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 do the All-Weather and the Permanent portfolio compare to the best portfolios we have benchmarked?
Below you can see the returns of the best portfolios that we have benchmarked.
| Name | See Portfolio | Year to date | Return in 2022 | 10 year return | CAGR since 1989 (%) | Draw Down |
|---|---|---|---|---|---|---|
| Ben Stein Retirement | Coming soon! | 4.05 | -18.03 | 9.46 | 10.8 | -35.42 |
| Paul Merriman 4-Fund-Portfolio | Coming soon! | 9.22 | -11.98 | 11.25 | 10.38 | -35.26 |
| S&P 500 | Coming soon! | 17.09 | -18.19 | 12.52 | 10.28 | -37.63 |
| Paul Merriman Target Date Portfolio (25 year old) | Coming soon! | 6.63 | -13.08 | 8.28 | 10.2 | -36.46 |
| Scott Adams Dilbert Portfolio | Coming soon! | 10.87 | -18.75 | 7.0 | 10.19 | -44.88 |
| JL Collins, Simple Path To Wealth, Wealth Building Portfolio | Coming soon! | 16.6 | -19.51 | 12.08 | 10.19 | -37.0 |
| American Institute of Individual Investors (AAII) Portfolio | Coming soon! | 3.74 | -13.91 | 9.7 | 10.16 | -40.85 |
| Paul Merriman Target Date Portfolio (35 year old) | Coming soon! | 6.57 | -13.22 | 8.31 | 10.08 | -36.35 |
| Assetbuilder.com Portfolio 14 | Coming soon! | 6.95 | -16.94 | 7.59 | 9.99 | -37.91 |
| Balanced Portfolio 90/10 | Coming soon! | 14.83 | -18.87 | 11.03 | 9.84 | -32.78 |
Let’s take a look at each portfolio to see what makes them so special.
What is the All-Weather portfolio?
The All-Weather portfolio is a portfolio designed by Ray Dalio. The All-Weather portfolio is a sibling of what the largest hedge fund in the world, Bridgewater, uses in one of its strategies.
The portfolio which Bridgewater uses is called the All-Seasons portfolio and is what is known as a risk parity portfolio. Ray Dalio founded Bridgewater. The All-Weather portfolio is designed in such a way that it can do well in any economic climate from high inflation and high-interest rates to market slumps.
The All-Weather portfolio appeared in Tony Robbins' excellent book on personal finance, Money: Master the Game: 7 Simple Steps to Financial Freedom.
Tony Robbins - Money: Master the Game: 7 Simple Steps to Financial Freedom
How do you build the All-Weather with ETFs?
Here is how you build the All-Weather Portfolio with ETFs.
- 30.00% US Total Stock Market (VTI)
- 40.00% Long-Term Treasuries (TLT)
- 15.00% Intermediate-Term Treasuries (VGIT)
- 7.50% Commodities (DBC / GSG)
- 7.50% Gold (IAU)
The portfolio has 30% in stocks which help drive returns in bull markets. The all-Weather portfolio has 55% in bonds which steadies the portfolio in rough times.
It has 7.5% in commodities and 7.5% in gold which helps in inflationary times and when the stock market slumps.
Together the asset mix creates a portfolio with very steady returns and a very low drawdown.
Up until 2022, the All-Weather portfolio has an under 5% drawdown. That was too good to be true and when the interest hikes began in 2022 in response to raging inflation all asset classes suffered losses.
The All-Weather portfolio suffered a large drawdown because of its 40% allocation to long-term bonds. You can read more about the All-Weather portfolio in our article that covers it.
What is the Permanent portfolio?
The Permanent portfolio is a work of art by Harry Browne. Harry Browne wanted a portfolio that could function as a bulwark against anything that would be thrown at it.
The Permanent portfolio uses a strategy of conservatism to preserve your capital. It has 25% in stocks so your portfolio will increase over time.
The Permanent portfolio receives great treatment in Craig Rowland’s book The Permanent Portfolio: Harry Browne’s Long-Term Investment Strategy
The Permanent Portfolio: Harry Browne’s Long-Term Investment Strategy
You can read more about the permanent portfolio in our article dedicated to this portfolio.
How do you build the Permanent portfolio with ETFs?
Here is how you build the Permanent Portfolio with ETFs
- 25.00% US Total Stock Market (VTI)
- 25.00% Long-Term Treasuries (TLT)
- 25.00% Cash (money market fund) (BIL)
- 25.00% Gold (IAU)
The portfolio has two very stable asset classes. These are cash and gold. Both cash and gold have lower volatility than stock. This also makes the portfolio very conservative and we won’t expect the permanent portfolio to outperform a 100% stock portfolio.
What is the difference between The All Weather portfolio and the Permanent portfolio?
The biggest difference between the All-Weather portfolio and the Permanent portfolio is the large portion of the cash that the Permanent portfolio holds. The 25% in cash that the Permanent portfolio allocated causes it to have a lower drawdown than the All-Weather portfolio.
The Permanent portfolio does however also have a lower return.
Are there better portfolios than the All-Weather portfolio and the permanent portfolio?
If you’re looking for higher returns then there are better portfolios available.
Both the All-Weather portfolio and the Permanent portfolio are very conservative. In addition, they have not proven as resistant to market shocks as we had hoped. In 2022 when interest rates were raised both portfolios has substantial drawdowns.
Suggestions for your next steps
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.
Related questions
Is the Permanent portfolio a good investment?
The Permanent portfolio is great if you are worried about losing money. The portfolio won’t give you the best return but will guard against market downturns.
