Morningstar

Morningstar.com's Model Portfolios Week

Sept. 14-18: Savers and retirees alike can check our hypothetical portfolios--developed by Christine Benz--for asset allocation ideas, benchmarking, and investment picks.

Whether you're launching a small business, renovating your bathroom, raising kids, or managing your portfolio, everyone can benefit from good models. Models provide real-world examples worthy of imitation.

With that in mind, Morningstar director of personal finance Christine Benz has developed a series of model portfolios over the past several years. One set is geared to investors in retirement; another set focuses on investors still in the accumulation phase. These portfolios are the centerpiece of our Special Report this week.

Investors can use these portfolios in a few key ways. Some may use the allocations to guide their own asset mix decisions. The "right" asset allocation for a given investor is very personalized, of course, based on your entire financial picture. But the model portfolios' allocations--based on research from Morningstar's Ibbotson Associates group--can give investors a starting point.

The model portfolios also provide investors with specific fund ideas to populate a portfolio. The funds included in these portfolios are among our analysts' favorite picks--what we call Medalist funds. Moreover, these model portfolios illustrate the virtue of simplicity. Oftentimes, investors have more moving parts than they actually need in their portfolios. Our model portfolios are streamlined, yet diversified in terms of asset mix.

And finally, investors can use these portfolios as benchmarks. We didn't design these portfolios to "beat the market." But we do expect them to perform reasonably well relative to a benchmark that mirrors their asset allocation. Investors could reasonably use the portfolio that roughly matches their own asset allocation to benchmark their own performance.

That said, these model portfolios aren't a call for investors to reinvent the wheel. If you have great funds already, for example, you would keep those investments but you might want to model some of the asset allocation or portfolio maintenance characteristics we provide.

During the week, we'll showcase our model portfolios for retirees and savers, for both taxable and nontaxable accounts. We'll also introduce a new portfolio for shorter-term goals on Friday. You can access all of the portfolios on Christine's Model Portfolio Homepage.

Monday: Tax-Deferred Retirement Bucket Portfolios

Model Portfolios

  • An Aggressive Retirement Bucket Portfolio
  • A Moderate Retirement Bucket Portfolio
  • A Conservative Retirement Bucket Portfolio

Plus, click here for ETF as well as fund-family specific versions of these portfolios.

Further Reading

The Bucket Approach to Retirement Allocation Learn the philosophy underpinning Christine's approach, how she built the portfolios, and how she regularly stress-tests them.

Bucket Portfolios for Retirement Income: Step by Step In this hour-long video presentation, Christine guides investors through her bucket portfolio-construction process.

Bucket Portfolio Maintenance: There's More Than One Way to Get It Done The best strategies allow investors to be strategic when tapping long-term assets.

Tuesday: Tax-Efficient Retirement Bucket Portfolios

Model Portfolios

  • 3 Tax-Efficient 'Bucket' Portfolios for Retirees
  • Tax-Efficient 'Bucket' Retirement Portfolios for Fidelity Investors
  • Tax-Efficient Bucket Portfolios for Vanguard Investors
  • Tax-Efficient 'Bucket' Portfolios for T. Rowe Price Investors
  • Tax-Efficient 'Bucket' Portfolios for Schwab Supermarket Investors

Further Viewing

Top Funds for Tax-Efficient Bucket Retirement Portfolios Tax-managed, index, and municipal-bond funds from Fidelity and Vanguard are among the best options for investors looking to minimize the tax drag on their portfolios, says Morningstar's Christine Benz.

Wednesday: Tax-Deferred Retirement Saver Portfolios

Model Portfolios

  • An Aggressive Retirement Saver Portfolio
  • A Moderate Retirement Saver Portfolio
  • A Conservative Retirement Saver Portfolio

Plus, click here for ETF as well as fund-family specific versions of these portfolios.

Further Reading

Morningstar's Model Retirement Saver Portfolios For investors who are accumulating assets for retirement, we create strategic ETF and mutual fund portfolios.

A Retirement Allocation Starter Kit Brian Huckstep of Morningstar Investment Management delves into the research and philosophy underpinning the Lifetime Allocation Indexes used in Christine Benz's model portfolios.

Thursday: Tax-Efficient Retirement Saver Portfolios

Model Portfolios

  • 3 Tax-Efficient Retirement-Saver Portfolios
  • Tax-Efficient Saver Portfolios for Fidelity Investors
  • Tax-Efficient Saver Portfolios for Vanguard Investors
  • Tax-Efficient Retirement Saver Portfolios for T. Rowe Price Investors
  • Tax-Efficient Retirement-Saver Portfolios for Schwab Supermarket Investors

Further Viewing

Investments to Avoid in Your Taxable Accounts Investors should exclude high-income bonds, TIPS, and equity funds with high turnover or high-dividend strategies from their taxable accounts, says Morningstar's Christine Benz.

Friday: Short- and Intermediate-Term Portfolios

Model Portfolio

  • Model Portfolios for Short- and Intermediate-Term Investors

Further Reading

Better Safe Than Sorry in Short-Term Portfolios For money needed in two years or less, even ultrashort-bond funds should be off the table, says Morningstar's Christine Benz.

5 Tips for Your Emergency Fund Portfolio How to navigate when fear is running high and yields are running low.

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