The 1 Decision Portfolio

Dr. Marvin Appel has written a book called Investing with Exchange-Traded Funds Made Easy. I originally saw a reference to a "1 Decision ETF Portfolio" discussed in his book in a Yahoo article back in August, but the link disappeared. I've recently seen references here and here to his "1 Decision ETF Portolio." The idea is that the only decision you make each year is re-balancing the portfolio.

It's 50% equities (S%P 500, REITs, and small-cap value) and 50% income (investment grade bonds and cash). This portfolio is supposed to make over 10% each year, yet still be safer (i.e. more stable) than a complete equity portfolio. All set up like this:

20 percent S&P 500
20 percent REITs
10 percent small-cap value
20 percent investment-grade bonds
30 percent cash (90-day U.S. Treasury bills)

Several things jump out at me. First, WOW is that a high percentage of cash. Second, where's the international portion? Third, 50% in income investments is a lot unless you're at least in your mid 40s, and I'd say it's lot unless you're in your mid 50s.

But here's the kicker: This is NOT the same "1 Decision" portfolio I saw in the article in August! I wrote down the portfolio and the link, the link just doesn't work anymore. Here's the portfolio and the associated ETF:

25% bond index (AGG)
25% real estate index (ICF)
25% international index (EFA)
25% domestic stock (right now a Russel 1000 value index, IWD)

The one decision you make each year is what that 25% domestic stock portion can be. You're supposed to pick what is performing best: S&P 500, Russell 1000 Value or Growth, or Russell 2000 Value or Growth (so it's large cap vs. large and medium cap vs. small cap). That's a big decision to make! If you guess right, this portfolio is supposed to get 15%/year. You probably wouldn't do too bad sticking with either S&P 500 or Russell 1000 - either Value or Growth, depending on what type of investor you are.

Now THAT is a portfolio worth tracking. A little more aggressive (less percentage in income-type investments) and a portion in international stocks (though no emerging markets).

My guess is that, though the articles don't mention it, his book has several "1 Decision Portfiolos."