This is the home of the Mad Money Machine Lazy Portfolio Analysis.

The following table shows the returns of the Lazy Portfolios from the “Investment Professionals.” They are sorted by 5-year returns ending 2011. To see the contents of each portfolio, search for the portfolio name on this page.

And now a different look at the same portfolios, showing Annualized returns for 5 years plotted against the annualized risk (Standard Deviation).

The dividend results are in, and I’ve updated the numbers, graphs, and tables. Not much change in the relative performance of the portfolios, but the year-end percentages did rise.

And here is the table:

Another year bites the dust and Harry Browne once again wins.

Here are the Lazy Portfolio Smackdown results for 2011. Note: these numbers are preliminary because mutual fund dividends have not yet been reported. So those lazy portfolios that hold mutual funds that pay dividends in mid to late December will probably end up about 1% higher than these numbers.

Incredibly, the Harry Browne Permanent Portfolio wins again. It beat all other non-permanent portfolios by at least 5.5%! Have a look at the chart:

Click on the image to get a larger, more readable graphic.

To see the components of each Lazy Portfolio, visit the Professional Lazy Portfolios page.

Look how steadily the Harry Browne Permanent Portfolio (HBPP) gained during 2011. Especially when compared to the rest. Look at the wild ride they would have put you through from April until September. Tough to stomach that!

And for those of you who love a more tabular look:

Breaking down the HBPP, here are how the individual components performed for 2011:

  WOW, who would have thought that long-term treasuries would go up 34%? And look at gold, up almost 10%, which also marks its 11th consecutive year of gains. Holy bullion Batman! Even cash money did you better than your bank account, up 1.4% in short-term Treasuries.

Thank you Harry Browne!

How about the losers? Well, the silly Dilbert portfolio, all stocks, dropped almost 10%. Scott Adams recommended this (google it), but it is pretty dumb. Not much less dumb is the portfolio I put out a few years ago, also all stocks, that sought to mimic the IFA Portfolio 100, their riskiest plan. So in a year when risky stocks did poorly, portfolios that invested in all risky stocks stunk.

How about something more reasonable? Good old Rick Ferri, the guy who says his “best investment in gold was his wedding ring” how did he do for you in 2011? Here is his portfolio (prior to December dividend reporting)

He puts 40% into a broad bond index, thinks REITs are cool, and adds some international equities for spice. The portfolio gained you less than if you had put the whole thing into SHY, the short-term treasuries fund. (But dividends for December are still coming) That’s pretty stinky. And as you can see from the chart, you got a pretty wild ride in 2011 to boot. And he makes money doing this?

Which non-Permanent Portfolio did best in 2011? That would be the Scott Burns Couch Potato Portfolio, up 5.9%. (And remember that December dividends aren’t yet included in this result.)

Two funds: stocks and TIPS. Stocks flat-lined. TIPS made you some money. And the ride wasn’t too wild, especially when compared to the others. But HBPP was better in both performance and risk.

I don’t want to wrap up this year-end review without mentioning the poor performance of PFPFX, the Permanent Portfolio Fund. With HBPP up 11.5%, you’d expect that the mutual fund loosely based upon his philosophy would be close to that, but you’d be wrong. PRPFX was up only 2.2% (including December dividends) for 2011. Why? Because it deviates from HBPP in risky ways including Silver, Swiss Francs, and growth stocks. And of course it has a 0.77% expense ratio for its management fees. That is disappointing. But THEY got $118 million, based upon having $15.4 billion invested. I’m not liking this.

Gee whiz, I wish I could create a mutual fund that invested in VTI, 30-year Treasuries, IAU, and short-term Treasuries. I’d pay something like 0.08% and would charge you people 0.20%. Let’s see, with $15 billion dollars under management, I’d take in $18 million each year. Easy money!

How do ya like ridin’ the roller coaster?  I prefer the Slow Train Comin’. Looks like the Permanent Portfolios are still victorious. Two months to go!

And for your tabular view:

The Lazy Portfolio by Taylor Larimore with just three funds had the following performance, ending 30 Sept 2011:

1-mo: -5.2%

2-mo: -8.3%

YTD: -5.2%

Since 12/31/09: 5.4%

I just received word that the Taylor Larimore 3 Fund and 4 Fund lazy portfolios that I have listed on this site are in error.

There should only be a 3 Fund portfolio comprised of the following (and the %’s vary for individual investors):

40% Vanguard Total Stock Market Index Fund (VTSMX)
20% Vanguard Total International (VGTSX)
40% Vanguard Total Bond Market (VBMFX)

I will correct this in future portfolio analysis updates.

Here’s your monthly Lazy Portfolios update (not that you’re watching that often).

click for full-size ugly graphology

Let’s look at 1 and 2 month returns just for fun, ok? First, returns for September 2011:

Next, returns for August and September 2011 combined:

Ouch Rick Ferri! I think it was this time last year when I went to the Bogleheads convention and Rick Ferri laughed at the idea of owning gold. Who’s laughing now, Ricki? Difference between bottom and top is almost 22%. That’s shocking.

And of course, full Year-To-Date returns for 2011 through September:

Wow, only two Lazy Portfolios are positive this year. Guess who???

It is striking that the PRPFX mutual fund is off so significantly from the pure Harry Browne ETF version. It is probably due to the fact that PRPFX holds some silver, which got killed, and foreign currencies, which were down against the dollar. 

Harry Browne, thank you.

Whoosh, getting whipsawed in 2011. Let’s step back and take a slightly longer term view of the performances of the Lazy Portfolios. (Caution, none of these portfolios were rebalanced!)

One thing that is particularly striking is that PRPFX took a much sharper dip so far in September than the pure Harry Browne 4xETF portfolios.  I suspect this is partly due to the fact that PRPFX owns some silver (down very sharply) and also some foreign currencies (down due to rising dollar).

Me still likey the Permanent Portfolio, even though what was once up about 12% for 2011 is now up (only) 6.5%.

Biggest Losers on the chart (caution, not rebalanced) were Dilbert (-1.9%) and Vanguard Windsor (-1.5%), and MMM Do It Yourself Funds (-0.7%). Glad I got out of that idea.

The divergence between the Permanent Portfolios and the other Lazy Portfolios might actually cause me to turn on the microphone and fire up a new podcast. Wow, lovin’ the PP.

I was feeling a little left out earlier this year… on my portfolio returns that is. But now I am feeling pretty good. Not that feelings should have anything to do with it! Table as of 10 August 2011.

One-twelfth of 2011 is already behind us and it appears that the Permanent Portfolios have decided to give the other Lazy Portfolios a head start on the year. Said another way: The Permanent Portfolios are ON SALE! Here is the table of returns through January.

The individual components of the Permanent Portfolios are as follows:

VTI +2.0% – Total Stock Market

TLT -3.1% – Long Term Bonds

IAU -6.4% – Gold

SHY  +0.1% – T-bills

—-

VBR +0.6% – Small Cap Value

VWO -3.4% – Emerging Markets

And for reference, here the components of all of the Lazy Portfolios we track here.