Another Simple Mutual Funds Portfolio

Thanks to Scott Burns, a columnist for the Dallas Morning News and creator of the Couch Potato Portfolio, we learn of another simple, but apparently effective mutual fund portfolio. The ''market return portfolio" is the creation of James N. Whiddon and Lance Alston, authors of the book, ''Wealth Without Worry," and financial planners at the small fee-only financial planning firm of JWA Financial Group Inc. in Dallas. They show that ..."a simple diversified index portfolio consisting of four basic index funds (20 percent S&P 500, 20 percent Russell 2000, 20 percent MSCI EAFE, and 40 percent Lehman Intermediate Government indexes) would have returned 12.70 percent a year during the 25 years from 1979 through 2004." Burns points out, in this article from the Boston Globe, that that exceeds the returns of several stalwart funds such as the Dodge and Cox Balanced Fund, the Fidelity Puritan fund, and the Vanguard Wellington fund.

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(May '04-Jun '05)