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Allan Roth Second Grader Portfolios can be built with 3-5 ETFs. They are exposed to between 30% and 100% equities.
Here is the asset allocation and ETFs you need to build the high-risk Second Grader portfolio
We cover all of Allan Roth’s portfolios further below.
Below you can see the historical return of the Second Grader portfolios
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|
|Allan Roth Second Grader High Risk Portfolio||6.66||-17.69||8.68||8.27||-34.91||0.05%||2.11|
|Allan Roth Second Grader Medium Risk Portfolio||4.82||-16.17||6.23||7.53||-21.56||0.04%||2.26|
|Allan Roth Second Grader Low Portfolio||2.98||-14.64||3.67||6.5||-14.64||0.04%||2.41|
|Allan Roth Second Grader Five-Fund High Risk Portfolio||5.84||-17.64||8.33||8.4||-34.2||0.07%||2.15|
|Allan Roth Second Grader Five-Fund Medium Risk Portfolio||4.34||-16.44||6.04||7.53||-21.56||0.05%||2.35|
|Allan Roth Second Grader Five-Fund Low Risk Portfolio||2.74||-14.77||3.57||6.49||-14.77||0.04%||2.45|
|Allan Roth Second Grader High Risk with CDs Portfolio||6.58||-16.24||8.69||8.02||-35.21||0.06%||2.03|
|Allan Roth Second Grader Medium Risk with CDs Portfolio||4.49||-10.36||6.21||6.54||-22.78||0.08%||1.92|
|Allan Roth Second Grader Low Risk with CDs Portfolio||2.4||-4.48||3.54||4.77||-10.34||0.11%||1.82|
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.
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|
Allan Roth is the founder of Wealthlogic and author of the excellent book How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn.
Allan Roth has written How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn. He has served as CFO and is offering financial solutions through his firm Wealthlogic. His portfolio, the second-grader portfolio, is regarded as a lazy portfolio.
We consider him as one of the good guys in investing due to his insistence of low fees, fiduciary responsibility, and being adamant about keeping investing simple.
Here’s who the second-grader is.
The story goes (in the book) that Allan Roth taught his son how to invest in the stock market. Allan Roth began teaching his son when his son was in second grade. His son has subsequently beaten Wall Street by holding this portfolio!
Dare to be Dull
– Allan Roth
In the book, Allan Roth describes the journey and reasoning for selecting the portfolio. The book is a masterpiece because it builds an ever-expanding foundation from which you can lay your knowledge on investing. It’s like he makes a ladder for you. With each step, you get a little smarter on how to invest and what the stock market is.
The video below is Allan Roth discussing the secrets of investing (which isn’t so secret)
Allan Roth’s Second Grader Portfolio is a close relative to the three-fund portfolio.
The Second-Grader portfolios are built by holding three core asset classes:
Some of Allan Roth’s portfolios use more asset classes to diversify more.
If you want an even simpler portfolio, you should check out the balanced portfolios. These portfolios are built using only two asset classes.
Now you might think that easy and simple will make you have lower returns. Not so in investing. Easy and simple is often better in investing.
Below you can find out how you build all of the Second-Grader portfolios with ETFs.
Note: CDs stands for Certificate of Deposit. It’s a low yield savings vehicle like a money market fund.
There are many alternatives to the Second Grader portfolio. The most prominent is the three-fund portfolio – also a Lazy Portfolios.
All of Vanguard’s target-date retirement funds use 3-4 funds (they also have an international bond fund).
I also consider Rick Ferri’s portfolios to be in the same league as Allan Roth’s Second Grader portfolio.
Finding the right portfolio is hard. Maintaining your portfolio is also daunting.
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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.