SPTI 20% · SHY 12% · VTIP 8% · AVDV 6% · AVUV 6% · EFV 6% · IWD 6% · VEA 6% · VIOO 6% · VNQ 6% · VOO 6% · VSS 6% · VWO 6% CAGR +6.1%
SPY CAGR +12.0%
Shaded: major market crises Bear Market (2022)
Ultimate Buy and Hold Portfolio 60/40
SPTI 20% · SHY 12% · VTIP 8% · AVDV 6% · AVUV 6% · EFV 6% · IWD 6% · VEA 6% · VIOO 6% · VNQ 6% · VOO 6% · VSS 6% · VWO 6% · International equity · U.S. small & mid cap · U.S. value
Paul Merriman · Merriman Financial Education Foundation, Fine Tuning tables · 2026Sources (3)
5yr · 2021.10 – 2026.10 · $10,000 lump sum · monthly rebalancing · dividends reinvested · no taxes or fees · month-end
Final Balance $13,456
Invested $10,000
Gain +$3,456
SPY alone: $17,597
Annualized return +6.1%
5.9pp behind SPY
Max drawdown · month-end -17.7%
18 months from trough to recovery
SPY -23.9%
Loss after a 1-year hold 14%
7 of 49 past windows
None when held 3+ years
SPY 12%
Performance ⌄
Performance
Over 5 years it grew 1.3x; SPY grew 1.8x over the same period.
Calendar-year returns
Of 4 complete years: 1 with a loss, 1 ahead of SPY.
Show as a table
| Year | Selected allocation | SPY | In-year low |
|---|---|---|---|
| 2025 | +16.0% | +17.7% | -0.7% |
| 2024 | +6.9% | +24.9% | -2.9% |
| 2023 | +12.0% | +26.2% | -7.0% |
| 2022 | -11.2% | -18.2% | -17.7% |
Depending on when you bought
Every month in the window taken as a start, held one, three or five years.
Observed windows overlap and are not independent samples. These shares are not probabilities of future gains.
Risk & recovery
The deepest fall was -17.7%, regained 18 months after the low. During the Bear Market (2022) it returned -15.4%, while SPY returned -19.7%.
Holdings
By asset class: equities 62% · bonds 32% · real estate 6%. Its dividend yield over the last 12 months was 3.0%; the results reinvest dividends.
- SPTIState Street SPDR Portfolio Intermediate Term Treasury ETF 20%
- SHYiShares 1-3 Year Treasury Bond ETF 12%
An ETF investing in U.S. Treasury bonds with maturities of 1–3 years.
- VTIPVanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 8%
- AVDVAvantis International Small Cap Value ETF 6%
- AVUVAvantis US Small Cap Value ETF 6%
- EFViShares MSCI EAFE Value ETF 6%
- IWDiShares Russell 1000 Value ETF 6%
- VEAVanguard FTSE Developed Markets Index Fund ETF Shares 6%
- VIOOVanguard S&P Small-Cap 600 Index Fund ETF Shares 6%
- VNQVanguard Real Estate Index Fund ETF Shares 6%
An ETF investing in U.S. real estate equities.
- VOOVanguard S&P 500 ETF 6%
A Vanguard ETF tracking the S&P 500 Index.
- VSSVanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares 6%
- VWOVanguard FTSE Emerging Markets Index Fund ETF Shares 6%
Where this allocation comes fromPaul Merriman · Merriman Financial Education Foundation, Fine Tuning tables · 2026
Also known as: Paul Merriman Ultimate Buy and Hold 60/40 · Ultimate Buy and Hold Moderate
Ten equity classes at 6% each, with 40% bonds split into intermediate Treasuries 20, short-term Treasuries 12 and short-term TIPS 8.
| Asset in the source | Weight | Lifolio ETF |
|---|---|---|
| S&P 500 | 6% | VOO |
| US large-cap value | 6% | IWD |
| US small-cap blend | 6% | VIOO |
| US small-cap value | 6% | AVUV |
| US REITs | 6% | VNQ |
| Developed-market stocks (ex-US) | 6% | VEA |
| International large-cap value | 6% | EFV |
| International small caps | 6% | VSS |
| International small-cap value | 6% | AVDV |
| Emerging-market stocks | 6% | VWO |
| US intermediate-term Treasuries | 20% | SPTI |
| US short-term Treasuries | 12% | SHY |
| US short-term TIPS | 8% | VTIP |
Bonds follow Merriman's 50/30/20 split of intermediate Treasuries, short-term Treasuries and short-term TIPS (tax-deferred version). AVDV listed in September 2019, so history starts then.
Source: paulmerriman.com irp.cdn-website.com portfoliocharts.com
Lifolio is not affiliated with or endorsed by the people or organizations cited. Figures are historical simulations under Lifolio's standard conditions. Sources checked 2026-11-01.
Questions & methodology
What does the Ultimate Buy and Hold Portfolio 60/40 hold?
State Street SPDR Portfolio Intermediate Term Treasury ETF (SPTI) iShares 1-3 Year Treasury Bond ETF (SHY): An ETF investing in U.S. Treasury bonds with maturities of 1–3 years. Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) Avantis International Small Cap Value ETF (AVDV) Avantis US Small Cap Value ETF (AVUV) iShares MSCI EAFE Value ETF (EFV) iShares Russell 1000 Value ETF (IWD) Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) Vanguard S&P Small-Cap 600 Index Fund ETF Shares (VIOO) Vanguard Real Estate Index Fund ETF Shares (VNQ): An ETF investing in U.S. real estate equities. Vanguard S&P 500 ETF (VOO): A Vanguard ETF tracking the S&P 500 Index. Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares (VSS) Vanguard FTSE Emerging Markets Index Fund ETF Shares (VWO)
What were the return and risk of the Ultimate Buy and Hold Portfolio 60/40?
From 2021.10 to 2026.10, the annualized return was +6.1% and the largest month-end drawdown was -17.7%. The Sharpe ratio (return for the risk) is 0.25.
How did it compare with holding SPY alone?
From 2021.10 to 2026.10, the annualized return was +6.1% for these weights and +12.0% for SPY. Over the same window the largest month-end drawdown was -17.7% for these weights and -23.9% for SPY.
How far did the Ultimate Buy and Hold Portfolio 60/40 fall, and how long did it take to get back?
Over the selected 5 years, the largest month-end decline was -17.7%, from a high in 2021.12 to a low in 2022.09. It regained the old high 18 months after the low.
Are dividends, taxes and exchange rates included?
Dividends are reinvested and results are in USD. Taxes, currency moves against your home currency and trading fees are not included. These results use US-listed ETFs; Korea-listed ETFs such as KODEX and TIGER can be added in the backtest.
The server calculates portfolio examples and actual user allocations with the same period, starting balance and settings. Validated metrics and their supporting charts are shown together.
Price data through: 2026.10.30