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Armstrong Ideal Index

Frank Armstrong Ideal Index Portfolio

Frank Armstrong III (founder, Investor Solutions Inc.) · 2002 (book 'The Informed Investor'; date varies by source)

Live account on this site. This portfolio is also tracked here with a virtual $100,000 since 21.10.2026. Live account on this site →

Where it stands today

Data through 2026-09. Updated every month.

Since January+9.1 %
Last 12 months+12.7 %
Last 5 years, per year+7.7 %
Now below the peak−3.0 %
Place by 12 months19 / 60

Our calculation, 1926-07 – 2026-09

Per year9.3 %
Real (after inflation)6.1 %
Volatility14.5 %
Worst drop−71.0 %
Worst year−33.4 % (1931)
Best year62.0 %
Worst 12 months−51.6 %
Positive years75 %

34 % of this history is calculated with stand-ins for asset classes that did not exist yet (see “How we model it” and the page about data). Without stand-ins the history starts in 1990.

Growth of $10,000

$4,147$35,740$308,016$2,654,584$22,878,060$197,170,5081930194019501960197019801990200020102020
Armstrong Ideal Index: $74,845,700S&P 500: $196,488,890

Where it came from

Frank Armstrong III is a fee-only investment adviser who founded Investor Solutions, Inc., a registered advisory firm in Coconut Grove, Florida, in 1993. He describes a seven-fund 'Ideal Index' portfolio in his book 'The Informed Investor: A Hype-Free Guide to Constructing a Sound Financial Portfolio' (American Management Association). Sources date the book to 2002 (a library listing), 2003 (Seeking Alpha) or a 2004 paperback; the portfolio is dated 2002 in the Portfolio Charts and Bogleheads write-ups.

The portfolio is built from modern portfolio theory ideas: broad diversification across US stocks sliced by size and value, a large share of foreign stocks, a small REIT position and a short-term bond sleeve. It is 70% equity-like assets and 30% fixed income. Portfolio Charts describes it as similar in spirit to Bill Bernstein's Coward's Portfolio: sliced US stocks, a healthy allocation to short-term bonds and a dash of REITs. It has one of the largest international allocations among the lazy portfolios on that site, and a stock tilt slightly towards value.

The Portfolio Charts site added the portfolio in September 2017 and notes that it rounded Armstrong's numbers to fit its tools (31 / 30 / 9 / 9 / 8 / 7 / 6 in the displayed version). Several sites (Bogleheads blog, Lazy Portfolio ETF, Optimized Portfolio) quote the finer weights 31% / 30% / 9.25% / 9.25% / 8% / 6.25% / 6.25%. I could not open the book, so the weights are taken from these secondary but mutually consistent sources.

Armstrong's own fund choices in the book were Vanguard index funds as reported by a secondary summary: VISVX (small value), VIVAX (value), VISGX (small growth), VFINX (S&P 500), VGTSX (total international), VGSIX (REIT) and VBISX (short-term bond). Modern ETF versions use IJS, VTV, IJT, VV, VEU, VNQ and SHY.

What is in it

International large-cap stocks (ex-US)31%VGTSX in the book per a secondary summary; VEU in ETF versions
US short-term bonds / Treasuries30%VBISX; SHY in ETF versions
US large-cap value9.2%VIVAX; VTV
US small-cap value9.2%VISVX; IJS
US REITs8%VGSIX; VNQ
US large-cap blend6.2%VFINX; VV
US small-cap growth6.2%VISGX; IJT

Source of the shares: Optimized Portfolio, Frank Armstrong Ideal Index Portfolio review; cross-checked with Lazy Portfolio ETF and Portfolio Charts — www.optimizedportfolio.com. Gives the 31 / 30 / 9.25 / 9.25 / 8 / 6.25 / 6.25 split. Lazy Portfolio ETF shows the same numbers for its 7-ETF version without naming a source; Portfolio Charts shows rounded weights (31/30/9/9/8/7/6) and attributes the idea to The Informed Investor. The book itself was not available to me.

How we model it

Developed markets outside the US31%
Short-term government bonds30%
US large value stocks9.2%
US small value stocks9.2%
Real estate (REITs)8%
US large companies (S&P 500)6.2%
US small companies6.2%

Ex-US stocks are mapped fully to intl_dev (developed ex-US, from 1990-07); the ETF version VEU also holds emerging markets (roughly a quarter of the fund), and the book's total-international fund does too, so em is not shown separately. US small-cap growth has no class of its own in our set, so it is mapped to us_small (all small caps). Short-term Treasuries map to bond_short (starts 1961-07); REITs map to reit (starts 1972-01). The exact weights sum to 1.

For a euro investor

The same portfolio bought with euros, without currency hedging: monthly returns converted at the end-of-month rate (German mark before 1999), inflation of the euro area. History in euros from 1953-10 to 2026-09.

Per year in euros8.7 %
After euro inflation5.8 %
Worst drop in euros−47.4 %
Worst year in euros−25.6 % (1973)
Safe withdrawal, 30 years, dollars4.26 % (1929-09)
Safe withdrawal, 30 years, euros3.21 % (1968-12)

The largest first-year withdrawal, then growing with inflation, that lasted 30 years from every monthly start. Test withdrawals for this portfolio →

How to build it with European funds

Examples of UCITS funds sold in the EU for each part of the portfolio. They track similar markets, not exactly the indices of our calculation.

PartShareExample funds (ISIN)
Developed markets outside the US (closest match)31%iShares Core MSCI Europe UCITS ETF EUR (Acc) IE00B4K48X80
iShares Core MSCI Japan IMI UCITS ETF IE00B4L5YX21
Short-term government bonds30%iShares USD Treasury Bond 1-3yr UCITS ETF (Dist) IE00B14X4S71
iShares Euro Government Bond 1-3yr UCITS ETF (Dist) IE00B14X4Q57
US large value stocks9.2%iShares Edge MSCI USA Value Factor UCITS ETF IE00BD1F4M44
US small value stocks9.2%SPDR MSCI USA Small Cap Value Weighted UCITS ETF IE00BSPLC413
Real estate (REITs)8%iShares US Property Yield UCITS ETF IE00B1FZSF77
iShares Developed Markets Property Yield UCITS ETF IE00B1FZS350
US large companies (S&P 500)6.2%iShares Core S&P 500 UCITS ETF USD (Acc) IE00B5BMR087
Vanguard S&P 500 UCITS ETF (USD) Distributing IE00B3XXRP09
US small companies6.2%SPDR Russell 2000 U.S. Small Cap UCITS ETF IE00BJ38QD84
iShares MSCI USA Small Cap ESG Enhanced CTB UCITS ETF USD (Acc) IE00B3VWM098

These are examples, not recommendations. Check the fund's key information document, costs and taxes with your broker before buying. Names and ISINs checked on justETF on 4 November 2026; Udak receives nothing from these funds.

The idea

Spread risk over the whole equity market with tilts to value and small caps, keep a large foreign sleeve, add a little REIT diversification and hold the safe part in short-term bonds so that interest-rate risk stays low. Index funds are used throughout because active management rarely earns its extra cost (the author's stated view in reviews of his book).

How people buy it

Seven index funds. In the book (per a secondary summary): Vanguard funds VISVX, VIVAX, VISGX, VFINX, VGTSX, VGSIX, VBISX. ETF versions: IJS, VTV, IJT, VV, VEU, VNQ, SHY.

Rebalancing as published

Not found: none of the secondary sources I read gives Armstrong's rebalancing rule.

Variants

Criticism

Through the eras

EraDatesTotalPer yearWorst dropS&P 500
Roaring Twenties boom1926-07 – 1929-08+91.9 %+22.9 %−5.0 %+153.7 %
Wall Street crash and Great Contraction1929-09 – 1932-07−62.5 %−28.5 %−71.0 %−78.2 %
New Deal recovery1932-08 – 1937-02+212.9 %+28.3 %−31.6 %+268.7 %
Recession within the Depression1937-03 – 1938-03−42.4 %−39.9 %−43.2 %−49.5 %
Rearmament and World War II1938-04 – 1945-09+183.6 %+14.9 %−20.6 %+205.8 %
Postwar expansion1945-10 – 1965-12+783.9 %+11.4 %−19.8 %+1212.9 %
Golden age of the 1950s1950-01 – 1959-12+298.7 %+14.8 %−12.6 %+438.8 %
Go-go years and nifty-fifty1966-01 – 1968-12+44.6 %+13.1 %−11.4 %+34.0 %
The Great Inflation (stagflation)1969-01 – 1982-07+172.4 %+7.7 %−27.8 %+84.6 %
1973-74 oil shock and bear market1973-01 – 1974-12−25.4 %−13.6 %−27.7 %−41.7 %
Second oil shock and the Volcker disinflation1979-01 – 1982-08+68.9 %+15.4 %−10.6 %+59.2 %
Great bull market in stocks and bonds1982-08 – 1999-12+856.6 %+13.8 %−20.7 %+2060.4 %
Black Monday1987-08 – 1987-12−15.4 %—−20.7 %−21.8 %
Savings-and-loan crisis and 1990 recession1990-07 – 1991-03+2.5 %—−13.1 %+7.4 %
1994 bond market massacre1994-02 – 1994-12−2.1 %—−4.4 %−3.2 %
Asian and Russian financial crises1997-07 – 1998-10+7.5 %+5.6 %−11.1 %+22.4 %
Dot-com bubble and crash2000-03 – 2002-10−7.2 %−2.8 %−13.7 %−37.2 %
Recovery and housing boom2002-11 – 2007-09+110.7 %+16.4 %−5.1 %+97.0 %
Global financial crisis2007-10 – 2009-03−36.0 %−25.7 %−40.4 %−44.7 %
The decade after the crisis2009-04 – 2019-12+176.4 %+9.9 %−15.8 %+411.2 %
Fourth-quarter 2018 sell-off2018-09 – 2018-12−10.3 %—−10.3 %−14.4 %
Covid crash and stimulus boom2020-02 – 2021-12+27.4 %+13.5 %−17.2 %+53.6 %
Inflation shock and rate hikes2022-01 – 2022-12−10.4 %−10.4 %−17.2 %−19.9 %

Calendar years

-33%62%1927: +24.0%1928: +27.8%1929: -10.5%1930: -24.0%19301931: -33.4%1932: -2.9%1933: +62.0%1934: +0.5%1935: +34.0%1936: +31.1%1937: -27.8%1938: +20.0%1939: -1.5%1940: -5.1%19401941: -5.6%1942: +17.1%1943: +31.1%1944: +22.2%1945: +33.8%1946: -4.9%1947: +3.4%1948: +1.1%1949: +14.4%1950: +28.5%19501951: +12.5%1952: +10.2%1953: -1.1%1954: +41.9%1955: +18.5%1956: +5.4%1957: -9.2%1958: +40.7%1959: +11.7%1960: -0.9%19601961: +20.5%1962: -5.0%1963: +17.8%1964: +13.6%1965: +16.1%1966: -4.7%1967: +28.5%1968: +18.1%1969: -9.8%1970: +5.8%19701971: +13.2%1972: +10.5%1973: -11.9%1974: -15.3%1975: +32.6%1976: +29.3%1977: +5.1%1978: +8.6%1979: +22.4%1980: +22.8%19801981: +6.5%1982: +24.5%1983: +22.6%1984: +9.2%1985: +25.7%1986: +14.7%1987: +0.6%1988: +16.2%1989: +20.3%1990: -7.3%19901991: +20.6%1992: +5.5%1993: +18.5%1994: +2.5%1995: +18.7%1996: +13.0%1997: +14.1%1998: +8.7%1999: +16.3%2000: +4.2%20002001: -0.8%2002: -7.8%2003: +30.9%2004: +15.0%2005: +9.5%2006: +18.0%2007: +3.9%2008: -25.4%2009: +21.1%2010: +12.4%20102011: -4.9%2012: +13.8%2013: +19.9%2014: +3.1%2015: -1.9%2016: +9.9%2017: +14.0%2018: -7.7%2019: +17.5%2020: +6.8%20202021: +17.0%2022: -10.4%2023: +12.6%2024: +7.9%2025: +17.6%

Any N-year period

Any N-year periodWorst10 % worse thanMedian10 % better thanBest
1 y (1192)−51.6 %−7.3 %+11.2 %+28.5 %+144.7 %
3 y (1168)−31.8 %−0.5 %+10.1 %+18.4 %+38.7 %
5 y (1144)−14.1 %+2.5 %+9.5 %+16.6 %+30.5 %
10 y (1084)−1.8 %+5.5 %+9.8 %+14.6 %+18.0 %
15 y (1024)+2.0 %+6.1 %+9.8 %+13.7 %+17.3 %
20 y (964)+4.0 %+6.7 %+10.4 %+13.1 %+14.8 %
30 y (844)+7.0 %+7.9 %+10.8 %+11.9 %+13.3 %

How it behaved in history

Published results (by others)

What we could not verify

Sources

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Calculated on historical data. Past results do not predict the future. Models before the 1990s use stand-ins for classes that had no index yet; fees, taxes and fund costs are not included. This is mathematics, not an investment recommendation.