Remember, these are only starting points to give you ideas for how you might begin to construct a portfolio suitable for you - taking into account your age, years to retirement, and risk tolerance, availability of tax-deferred accounts, and other factors. Many of the books and selected article references and links in this Web site discuss how to go about this.

Check the Assumptions of the models (Section 9.1) so you understand the basis of their construction and modification.

The portfolios are summarized in the following table by their various characteristics.

Portfolio name	Index based	Specific funds	Oriented for taxable or non-taxable	Specified by risk-tolerance	Specified by age	Specified by years to retirement
Armstrong: index	yes	yes	both	yes	-	-
Bernstein: index	yes	yes	both	yes	-	-
Coffeehouse: index	yes	yes	both	complexity	-	-
AAII: Index asset alloc	both	no	both	-	-	-
Morningstar: index or great mgrs	yes	yes	both	yes	-	-
Morningstar: risk tolerance	no	yes	both	yes	yes	-
C. Schwab: risk tolerance	-	no	both	yes	-	-
Evans & Malkiel: index by age	yes	yes	both	yes	yes	-
Newsweek 401K Quinn/RiskMetrics: age	-	no	non-taxable	yes	yes	-
Fortune 401K: age	-	lists of non-index funds	non-taxable	-	yes	-
USAA: age to retirement	-	no	-	yes	-	yes
Money Mag (11/2002): age to retirement	-	no	-	yes	-	yes
Clements (2003): risk tolerance	yes	no	both	yes	-	-
Swedroe (2001): Efficient portfolio	yes	yes	both	yes	-	-
Malkiel (2003): age	yes	yes	both	yes	yes	-

1. William Bernstein, The four pillers of Investing: lessons for building a winning portfolio, 2002. These four portfolio show examples when when you are constrained by availability of taxable or non-taxable (eg. 401K, IRA, etc.) accounts as well as by age and whether the assets are in taxable or tax-deferred accounts.
   1. W. Bernstein: Taxable Ted portfolio (50/50)
   2. W. Bernstein: (Tax-) Sheltered Sam portfolio (60/40)
   3. W. Bernstein: In-between Ida portfolio (50/50)
   4. W. Bernstein: Young Yvonne portfolio (60/40)

2. Frank Armstrong III, The Informed Investor: A hype-free guide to constructing a sound financial portfolio, 2002. Armstrong uses DFA funds. DFA funds are not directly accessible to most individuals because of their minimum purchase requirements ($2,000,000). However, they are available from some fee-only planners, generally with a 1% fee.

   Therefore, we created an alternative lower-cost portfolio by substituting Vanguard funds where possible and low cost no-load (i.e., no 12b-1, low expense ratios) funds that maintain their equity asset class focus when there was no corresponding index fund. This lets us approximate the DFA type index funds, although it does not cover the asset classes quite as well.

   To show how one can use the same relative asset allocation within major classes (i.e. equities and fixed-income), we computed 5 different ranges of (equities/fixed-income) using the same relative allocations for both the DFA funds and the Vanguard funds. They differ only in the ratio of (equities/fixed-income).

   1. Frank Armstrong portfolio (80/20) DFA funds
   2. Frank Armstrong portfolio (60/40) DFA funds
   3. Frank Armstrong portfolio (50/50) DFA funds
   4. Frank Armstrong portfolio (40/60) DFA funds
   5. Frank Armstrong portfolio (20/80) DFA funds

   6. Frank Armstrong portfolio (80/20) Vanguard
   7. Frank Armstrong portfolio (60/40) Vanguard
   8. Frank Armstrong portfolio (50/50) Vanguard
   9. Frank Armstrong portfolio (40/60) Vanguard
   10. Frank Armstrong portfolio (20/80) Vanguard

3. Bill Schultheis, The "Coffeehouse Portfolio", is an all index fund portfolio described in The Coffeehouse Portfolio, Seven index funds for bulls and bears by Paul Farrell, CBS.MarketWatch.com, Nov 15, 2002.

4. The AAII Asset Allocation Portfolio, by John Markese, describes 3 all-fund asset-allocation portfolios at different levels of complexity in Your mutual fund portfolio: choosing the level of complexity by John Markese, AAII Journal, Nov 24(10) 4-6, 2002. They may be constructed from index funds, ETFs, or other mutual funds. A related article ( Asset allocation approaches: building from the bottom up by James B Cloonan, AAII Journal, Oct 24(9) 27-30, 2002) suggests specific (mostly Vanguard although two are ETFs IWO and IWN) funds as surrogates for some of these asset classes. These surrogates are specified after each class in the second table. There are a number of assumptions and suggestions on how to use these portfolios in the articles.

   Asset	Level I	Level II	Level III
   US stocks	Tot US stock Idx VTMSX	S&P 500 Idx VFINX Ext. Market Idx	S&P 500 Idx VFINX Mid/Sm-cap growth VIGSX Mid/Sm-cap value VISVX Sector technology FSPTX Sector biotech/health FBIOX Sector REIT VGSIX
   International stocks	Tot Intl. stock Idx VGTSX	European stock Idx VESIX Pacific stock Idx VPACX Emerging mkts stock Idx VEIEX	International stock fund VGTSX Emerging mkts stock Idx VEIEX
   Bonds	Tot US Gov or muni bond Idx VBMFX	Short-term US Gov or muni Idx VSIFX or muni Idx VWSTX Long-term US Gov or muni Idx VUSTX or muni Idx VWLTX	Corporate high-yield fund VWEHX Long-term US Gov VUSTX or muni Idx VWLTX
   Money market fund	Money market fund	Money market fund	Money market fund

   In the October 2002 article, Cloonan suggests four portfolios (as of 8/30/2002) with increased complexity (and increased estimated returns).

   Asset class	Portfolio 1 %	Portfolio 2 %	Portfolio 3 %	Portfolio 4 %
   Total Stock Market (VTMSX)	60%	80%	-	-
   Large-Cap Growth (VIGRX)	-	-	20.0%	20.0%
   Large-Cap Value (VIVAX)	-	-	20.0%	20.0%
   Small-Cap Growth (IWO/ VIGSX)	-	-	12.5%	10.0%
   Small-Cap Value (IWN/ VISVX)	-	-	12.5%	10.0%
   Bonds (** Tot Bond Idx VBMFX)	40.0% **	20.0% **	25.0%	20.0%
   Cash	-	-	10.0%	10.0%
   Gold Stocks (VGPMX)	0%	0%	0%	10.0%

5. Morningstar Fund Investor Feb, 2002 - model portfolios. They divide the portfolios by index based versus entirely managed funds based. However, almost all managed funds have not shown the ability to continually to do well over long periods of time.
   1. Morningstar FI 2/02 Index anchored (60/40)
   2. Morningstar FI 2/02 Index anchored IRA (62/38)
   3. Morningstar FI 2/02 Great Managers (76/24), non-indexed based
   4. Morningstar FI 2/02 Great Managers IRA (82/18), non-indexed based

6. Morningstar Fund Investor May, 2002 - model portfolios. They divide the three portfolios by aggressiveness which could be used for different age groups.
   1. Morningstar FI 5/02 Aggressive Wealth Maker (82/18) - aggressive growth, non-indexed based
   2. Morningstar FI 5/02 Wealth Maker (62/38) - growth, non-indexed based
   3. Morningstar FI 5/02 Wealth Keeper (34/66) - conservative, non-indexed based

   These three non-index fund portfolios were updated with a few new funds and have changed slightly from May 2002 to September 2002 in Morningstar book. The book goes into details on the construction of these portfolios. Note that these additional expenses in continually changing funds (because they are no longer available, are not "good", etc.) can add up and detract from your total return.

   1. Morningstar book 03 Aggressive Wealth Maker (79/21) - aggressive growth, non-indexed based
   2. Morningstar book 03 Wealth Maker (62/38) - growth, non-indexed based
   3. Morningstar book 03 Wealth Keeper (34/66) - conservative, non-indexed based

7. Schwab 401k Tools suggested allocations by risk tolerance - Schwab 401k allocations by risk tolerance. However, they do not specify particular sub-asset classes. Neither does it take into account the mix of assets in taxable and non-taxable accounts (often the situation). If you select funds to populate these basic asset allocations, you can look up summary fund statistics for your portfolio at www.quicken.com.

   * Note: "Avg Return", "Best Year", "Worst Year" are for 1970-2001. See Schwab Web site for details and for their definitions of risk tolerance (click on the Risk Tolerance).

   Risk Tolerance	% Stocks	% Large Cap Stocks	% Small Cap Stocks	% International Stocks	% Bonds	% Cash	% Avg Return*	% Best Year*	% Worst Year*
   Aggressive	95%	40%	25%	30%	0%	5%	11.91%	41.74%	-24.11%
   Moderately Aggressive	80%	35%	20%	25%	15%	5%	11.56%	36.09%	-19.38%
   Moderate	60%	30%	15%	15%	30%	10%	10.93%	29.65%	-13.09%
   Moderately Conservative	40%	20%	10%	10%	45%	15%	10.14%	25.49%	-6.64%
   Conservative	20%	15%	0%	5%	55%	25%	9.06%	21.76%	-1.27%
   Short Term	0%	0%	0%	0%	40%	60%	7.5%	17.96%	0.28%

8. R. E. Evans and B. G. Malkiel, Earn More (Sleep Better): The Index fund solution - A step-by-step investors guide, 1999. These define the portfolio by approximate age groups.
   1. Evans & Malkiel 30 year old earning (80/20) - aggressive growth
   2. Evans & Malkiel 50 year old (73/27) - growth
   3. Evans & Malkiel 65 year old retired (60/40) - conservative

9. Newsweek J.B. Quinn/RiskMetrics suggested allocations by age - broad allocations suggested in "Burned, Why we have to fix the 401K", Jane Bryant Quinn, Newsweek, August 19, 2002, pp 25-31. These are their suggested models for broad asset allocation within a 401K. However, it does not specify particular sub-asset classes. Neither does it take into account the mix of assets in taxable and non-taxable accounts (often the situation). If you select funds to populate these basic asset allocations, you can look up summary fund statistics for your portfolio at www.quicken.com.

   Stocks= [US stocks (29.20%) + Foreign stocks (4.47%)].
   Fixed-income= [Cash (4.69%) + Bonds (61.44%)].

   Age range	Category	% Stocks	% Bonds	% Cash	Notes
   26-45	Aggressive	100%	0%	0%	higher-risk stocks with greater growth potential
   46-55	Growth	90%	10%	0%	Peak earning years. Broadly diversity stock portfolio
   56-65	Balanced	60%	30%	10%	house paid off, kids out of college, focus on higher dividend yielding stocks
   66-75	Conservative	10%	70%	20%	higher dividend yielding utilities during early retirement years
   76+	Short Term	0%	10%	90%	no wages, supersafe portfolio, but will be ok with what is left

10. Fortune Magazine suggested three allocations by age in David Stires, 401(K) First Aid Kit, Time for a Checkup, October 28, 2002. The suggested allocations are part of the article and are entitled 401(K) First Aid Kit: Reslicing the Pie. These are their suggested models for broad asset allocation within a 401K. However, it does not specify particular sub-asset classes. Neither does it take into account the mix of assets in taxable and non-taxable accounts (often the situation). If you select funds to populate these basic asset allocations, you can look up summary fund statistics for your portfolio at www.quicken.com.

    Age	% Large Cap US Stock	% Mid Cap US Stock	% Small US Cap Stock	% Foreign Stock	% Fixed income
    30 year old	25%	20%	20%	20%	15%
    45 year old	20%	20%	15%	15%	30%
    60 year old	20%	20%	10%	10%	40%

11. USAA suggests three allocations by age to retirement in USAA.com Smart Solutions. However, they do not specify particular sub-asset classes. Neither does it take into account the mix of assets in taxable and non-taxable accounts (often the situation). If you select funds to populate these basic asset allocations, you can look up summary fund statistics for your portfolio at www.quicken.com.

    Age from retirement	% Investment grade bonds	% High-yield bonds	% Large Cap US Stock	% Small US Cap Stock	% International Stock	% Emerging Markets Stock	Notes
    Aggressive Model 10 or more years	10%	10%	45%	15%	15%	5%	Growth extremely important, high volatility ok, inflation high concern
    Moderate Model 5-9 years	40%	10%	30%	10%	10%	0%	Growth & Income top priorities, moderate volatility ok, inflation moderate concern
    Conservative Model 5 or less years	80%	0%	20%	0%	0%	0%	Income top priority, low volatility, inflation minor concern

12. Money Mag. Nov, 2002 suggests three allocations by age to retirement in money.cnn.com in an article "Rules for rebalancing", by Penelope Wang, Money, Nov 2002, 97-100. However, they do not specify particular sub-asset classes. They do suggest how to rebalance taking tax-deferred account into accounty. If you select funds to populate these basic asset allocations, you can look up summary fund statistics for your portfolio at www.quicken.com.

    Age from retirement	% Bonds	% Large Cap Stocks	% Mid Cap Stocks	% Small Cap Stocks	% International Stock	Notes
    Aggressive Model 10 or more years	20%	40%	15%	10%	15%	For investors with 20 to 30 years until retirement
    Moderate Model 5-9 years	35%	35%	10%	10%	10%	For investors with 5 to 10 years until retirement
    Conservative Model 5 or less years	50%	36%	0%	7%	7%	For investores who are already retired

13. Clements (2003): risk tolerance suggests three allocations by risk tolerance in his book. He recommends funds from: Barclays, Bridgeway, DFA, Dreyfus, Fidelity, T.Rowe Price, Schwab, TIAA-CREF, USAA, Vanguard. In these portfolios, he does not differentiate between Mid-cap and Small-cap which are lumped together under "Small-cap", and he does does not differentiate between value and growth stocks. We have suggested representative funds from Vanguard with links to Morningstar.

    Risk Tolerance	% Money Market fund	% Short-term Corp. Bonds VFSTX	% TIPS Bonds VIPSX	% Bond Market Index VBMFX	% High-yeld Bonds VWEHX	% REITs VGSIX	% Large Cap Stocks VFINX	% Small Cap Stocks NAESX	% Foreign Stocks VGTSX	% Developed Foreign Stocks VDMIX	% Emerging Markets Stocks VEIEX
    Aggressive Model	0%	10%	10%	0%	10%	10%	30%	10%	0%	15%	5%
    Conservative Model	0%	15%	15%	15%	5%	5%	27%	8%	10%	0%	0%
    Retirement Model	5%	20%	10%	10%	5%	5%	27%	8%	10%	0%	0%

14. Swedroe (2001): efficient portfolio suggests an efficient frontier portfolio in his excellenty book. He presents one model for an efficient frontier equities model. He then suggests that you can not simply use a generic optimized model since the results will vary depending which time periods you use. However, this represents a reasonable first start that can be adjusted according to your comfort with various asset style classes (i.e. stocks styles - not bond styles). You could adjust the equities/fixed ratios depending on your risk tolerance. The basic equities portfolio is divided into 70% domestic and 30% international. He suggests that if you are not comfortable with 30%, you can decrease it (say to 20% to 25%). He recommends DFA primarily and also some Vanguard funds as well as a few other funds. We have suggested representative funds here from Vanguard where the funds exist with links to Morningstar. There are several Vanguard bond funds thay will work depending on the bond yield curve and your tax situation.

    % Short-term Bonds VBISX, VFSTX, VMLTX, or VIPSX	% REITs VGSIX	% Large Cap VFINX	% Large Cap Value VIVAX	% Small Cap NAESX, VTMSX	% Small Cap Value VISVX	% Foreign Large Value VDMIX	% Foreign Small DFISX	% Foreign Small Value DISVX	% Emerging Markets Stocks VEIEX
    % depends on risk tolerance	10%	10%	20%	10%	20%	10%	5%	10%	5%

15. Malkiel (2003): efficient portfolio suggests four age related portfolios in his excellent book. We have suggested representative Vanguard funds with links to Morningstar. Note: the International index VGTSX has the VEIEX included. The VDMIX does not. In these computations, we assumed you use the VDMIX for Internernational stocks and buy the VEIEX separately.

    Age in life cycle	% Money market, or Short-term Bonds (1-1.5 yrs) VBISX, VFSTX, or VMLTX,	% TIPS Bonds VIPSX	% Bonds VFIIX, or VBMFX	% REITs VGSIX	% US total Stock Market VTSMX, FSTMX, or POMIX	% International Stock Market VGTSX, VDMIX, FSIIX, or DIISX	% Emerging Markets Stocks VEIEX
    Mid-20s	5%	5%	15%	10%	43.33%	16.67%	5%
    Late 30s to early 40s	5%	5%	20%	10%	36.67%	18.33%	0%
    Mid 50s	5%	5%	32.5%	12.5%	33.75%	11.25%	0%
    Late 60s and beyond	10%	5%	45%	15%	25%	0%	0%