What's a Butterfly Portfolio? Graham Stephan Has the Answer (2024)

FAQs

What's a Butterfly Portfolio? Graham Stephan Has the Answer? ›

The golden butterfly portfolio involves dividing your investments equally into five market segments. Here's how to split up your investments according to Portfolio Charts (the version Stephan shared had some slight differences, but this is the original): 20% U.S. total stock market. 20% small cap value stocks.

The Golden Butterfly Portfolio contains 40% Stocks, 40% Bonds, 20% Commodities. US Small Cap Value: 1871-1926: data source extended with US Total Stock Market returns. Over the last 30 years (last update: May 2024), the portfolio has returned 7.71% annualized, with a maximum drawdown of -17.95%.

This shows clearly that while there may be short-term drawdowns, the Golden Butterfly delivers reliable results in the longer term that not only protect investments but provide growth opportunities. Drawdowns are a fact of life for investment portfolios, and the Golden Butterfly is no different.

The permanent portfolio is an investment portfolio designed to perform well in all economic conditions. It was devised by free-market investment analyst, Harry Browne, in the 1980s. The permanent portfolio is composed of an equal allocation of stocks, bonds, gold, and cash, or Treasury bills.

This portfolio invests in stocks, bonds, and gold, allowing it to avoid significant losses in any economic scenario. Although it reduces volatility, the golden butterfly has much lower long-term returns than stock-heavy portfolios.

Apple is Berkshire's largest public stock holding by far. Berkshire's $151 billion Apple stake is roughly four times larger than its second-largest holding. Buffett first bought Apple shares in the first quarter of 2016, and Apple's stock price is up more than 500% since the beginning of 2016.

At age 60–69, consider a moderate portfolio (60% stock, 35% bonds, 5% cash/cash investments); 70–79, moderately conservative (40% stock, 50% bonds, 10% cash/cash investments); 80 and above, conservative (20% stock, 50% bonds, 30% cash/cash investments).

Based on analyst ratings, Butterfly Network's 12-month average price target is $3.38. Butterfly Network has 272.16% upside potential, based on the analysts' average price target. Butterfly Network has a consensus rating of Moderate Buy which is based on 2 buy ratings, 0 hold ratings and 0 sell ratings.

The Golden Butterfly Portfolio is a balanced investment strategy that seeks to deliver steady, long-term growth by diversifying assets across multiple classes. It consists of 40% stocks, 40% bonds, and 20% commodities.

Who has the most successful stock portfolio? ›

Warren Buffett

Buffett might be the most famous investor of all. Known as the "Oracle of Omaha," he worked for and learned from Graham until the value investing pioneer retired. Buffett then proceeded to establish his own investing partnership to focus on buying stakes in quality companies at fair prices.

A Lazy Portfolio is a collection of investments that requires very little maintenance. It's the typical passive investing strategy, for long-term investors, with time horizons of more than 10 years. Choose your investment style (Classic or Alternative?), pick your Lazy Portfolios and implement them with ETFs.

But while the Permanent Portfolio equally balances prosperity, recession, inflation, and deflation, the Golden Butterfly tilts the assets towards prosperity with an additional allocation to small cap value.

The three-fund portfolio consists of a total stock market index fund, a total international stock index fund, and a total bond market fund. Asset allocation between those three funds is up to the investor based on their age and risk tolerance.

The 5% rule says as an investor, you should not invest more than 5% of your total portfolio in any one option alone. This simple technique will ensure you have a balanced portfolio.

Trying to time the market increases your risk of buying or selling at the wrong time. By investing over a longer timeframe, you're more likely to benefit from trends that can support positive performance over a matter of years.

The Graham number measures a stock's fundamental value by taking into account the company's EPS and BVPS. It represents the upper bound of the price range that a defensive investor should pay for a stock, and it suggests that any stock price below the Graham number is undervalued and thus worth investing in.