EN
EnglishРусскийDeutschFrançaisEspañol

← All portfolios

Second-Grader's

Second-Grader's Starter Portfolio

Paul B. Farrell (MarketWatch columnist); not Scott Burns · 2007-02 (MarketWatch column, about 19 Feb 2007)

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+10.1 %
Last 12 months+13.4 %
Last 5 years, per year+10.3 %
Now below the peak−1.5 %
Place by 12 months12 / 60

Our calculation, 1926-07 – 2026-09

Per year9.5 %
Real (after inflation)6.3 %
Volatility16.4 %
Worst drop−79.4 %
Worst year−39.3 % (1931)
Best year51.6 %
Worst 12 months−60.5 %
Positive years75 %

25 % 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
Second-Grader's: $90,241,002S&P 500: $196,488,890

Where it came from

Checking the claim that this is a Scott Burns portfolio did not hold up. In every source found, the Second-Grader's Starter Portfolio is a MarketWatch lazy-portfolio column by Paul B. Farrell, not a Burns product. A Bogleheads forum thread dated 21 Feb 2007 discusses Farrell's column of 19 February 2007. Farrell is the writer who popularised the label 'lazy portfolios' (Bogleheads wiki).

The story behind it, as given by MyPlanIQ and Money Crashers, is a second-grader who receives a gift of about $10,000 from a grandparent. The forum thread instead mentions a $9,000 minimum (three funds at $3,000 each) and a person named Kevin whose minimums were waived; I could not reconcile the two accounts. The column's message was simplicity: three Vanguard index funds held for a very long horizon.

Allan Roth's 2009 book How a Second Grader Beats Wall Street is a different work with 'second grader' in the title. White Coat Investor lists Roth's 'advanced second-grader' portfolio as roughly 54% total US stock, 27% total international, 6% REIT, 3% precious metals and 10% total bond. It should not be confused with Farrell's.

Burns does have a ten-fund equal-weight portfolio, Ten-Speed (10% each in ten funds). It is part of the Couch Potato family, not the second-grader portfolio.

What is in it

Vanguard Total Stock Market Index (VTSMX; later VTI)60%US stocks
Vanguard Total International Stock Index (VGTSX; later VEU/VXUS)30%stocks outside the US; sites name either a total international fund (VGTSX/VXUS) or an all-world ex-US fund (VEU)
Vanguard Total Bond Market Index (VBMFX; later BND)10%bonds

Source of the shares: Bogleheads forum thread 'Paul Farrell - The second-grader starter portfolio' (21 Feb 2007) — www.bogleheads.org. Thread participants quote Farrell's column as 60% VTSMX, 30% VGTSX, 10% VBMFX. Four other pages agree on 60/30/10 but name the foreign fund differently: Optimized Portfolio uses VTI, VXUS, BND; lazyportfolioetf.com uses VTI, VEU, BND; MyPlanIQ and Money Crashers also list 60/30/10. A personal-finance blog describes a Farrell MarketWatch column of 18 August 2014 that lists this portfolio as three Vanguard index funds in the same proportions (90 percent stocks). The original MarketWatch columns could not be retrieved (MarketWatch refuses automated access and the web archive was rate-limited), so all of this is secondary.

How we model it

US large companies (S&P 500)60%
Developed markets outside the US30%
US bond market (aggregate)10%

Total US market is approximated by the S&P 500, so the mid- and small-cap part of the US market is missing. The 30 percent international slice is mapped to developed ex-US (intl_dev) only, although every fund named for it (total international or all-world ex-US) also holds emerging-market and small-cap stocks; our proxy therefore has no emerging-market exposure. Total bond market is approximated by our aggregate series (bond_agg).

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 euros9.0 %
After euro inflation6.2 %
Worst drop in euros−55.5 %
Worst year in euros−32.8 % (1974)
Safe withdrawal, 30 years, dollars3.24 % (1929-09)
Safe withdrawal, 30 years, euros2.65 % (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)
US large companies (S&P 500)60%iShares Core S&P 500 UCITS ETF USD (Acc) IE00B5BMR087
Vanguard S&P 500 UCITS ETF (USD) Distributing IE00B3XXRP09
Developed markets outside the US (closest match)30%iShares Core MSCI Europe UCITS ETF EUR (Acc) IE00B4K48X80
iShares Core MSCI Japan IMI UCITS ETF IE00B4L5YX21
US bond market (aggregate) (closest match)10%iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) IE00BDBRDM35
iShares Core Global Aggregate Bond UCITS ETF USD (Dist) IE00B3F81409

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

A starting portfolio for a very young investor with a very long horizon: mostly stocks, globally diversified, with a small bond cushion.

How people buy it

Three Vanguard index funds (VTSMX, VGTSX, VBMFX) or ETFs VTI, VEU/VXUS, BND. The thread notes a $3,000 minimum per fund.

Rebalancing as published

Not found in the sources read.

Variants

Criticism

Through the eras

EraDatesTotalPer yearWorst dropS&P 500
Roaring Twenties boom1926-07 – 1929-08+135.8 %+31.1 %−5.3 %+153.7 %
Wall Street crash and Great Contraction1929-09 – 1932-07−73.6 %−36.6 %−79.4 %−78.2 %
New Deal recovery1932-08 – 1937-02+234.2 %+30.1 %−26.1 %+268.7 %
Recession within the Depression1937-03 – 1938-03−44.9 %−42.4 %−44.9 %−49.5 %
Rearmament and World War II1938-04 – 1945-09+180.7 %+14.8 %−25.3 %+205.8 %
Postwar expansion1945-10 – 1965-12+994.7 %+12.5 %−22.0 %+1212.9 %
Golden age of the 1950s1950-01 – 1959-12+370.2 %+16.7 %−12.8 %+438.8 %
Go-go years and nifty-fifty1966-01 – 1968-12+31.2 %+9.5 %−13.9 %+34.0 %
The Great Inflation (stagflation)1969-01 – 1982-07+89.9 %+4.8 %−42.3 %+84.6 %
1973-74 oil shock and bear market1973-01 – 1974-12−37.5 %−20.9 %−42.3 %−41.7 %
Second oil shock and the Volcker disinflation1979-01 – 1982-08+56.3 %+12.9 %−13.2 %+59.2 %
Great bull market in stocks and bonds1982-08 – 1999-12+1407.3 %+16.9 %−27.5 %+2060.4 %
Black Monday1987-08 – 1987-12−19.9 %—−27.5 %−21.8 %
Savings-and-loan crisis and 1990 recession1990-07 – 1991-03+3.0 %—−15.7 %+7.4 %
1994 bond market massacre1994-02 – 1994-12−2.4 %—−5.3 %−3.2 %
Asian and Russian financial crises1997-07 – 1998-10+14.6 %+10.8 %−13.7 %+22.4 %
Dot-com bubble and crash2000-03 – 2002-10−33.3 %−14.1 %−39.5 %−37.2 %
Recovery and housing boom2002-11 – 2007-09+115.5 %+16.9 %−7.2 %+97.0 %
Global financial crisis2007-10 – 2009-03−41.9 %−30.4 %−47.3 %−44.7 %
The decade after the crisis2009-04 – 2019-12+285.5 %+13.4 %−17.0 %+411.2 %
Fourth-quarter 2018 sell-off2018-09 – 2018-12−12.3 %—−12.6 %−14.4 %
Covid crash and stimulus boom2020-02 – 2021-12+40.0 %+19.2 %−18.4 %+53.6 %
Inflation shock and rate hikes2022-01 – 2022-12−17.8 %−17.8 %−24.5 %−19.9 %

Calendar years

-39%52%1927: +29.7%1928: +35.3%1929: -12.8%1930: -25.5%19301931: -39.3%1932: -7.2%1933: +51.6%1934: +3.5%1935: +40.9%1936: +29.2%1937: -30.9%1938: +25.8%1939: +2.6%1940: -6.0%19401941: -9.7%1942: +15.0%1943: +25.7%1944: +19.6%1945: +35.2%1946: -5.6%1947: +3.2%1948: +2.0%1949: +18.4%1950: +27.1%19501951: +18.8%1952: +12.3%1953: +1.1%1954: +45.6%1955: +22.7%1956: +7.3%1957: -8.3%1958: +40.3%1959: +11.2%1960: +2.2%19601961: +24.4%1962: -8.6%1963: +19.0%1964: +14.8%1965: +13.1%1966: -7.4%1967: +25.5%1968: +12.9%1969: -10.4%1970: +1.9%19701971: +15.7%1972: +15.5%1973: -17.1%1974: -24.6%1975: +35.0%1976: +25.8%1977: -2.8%1978: +7.3%1979: +21.3%1980: +29.8%19801981: -2.4%1982: +23.2%1983: +20.5%1984: +5.0%1985: +32.3%1986: +16.9%1987: +1.6%1988: +16.9%1989: +27.3%1990: -6.5%19901991: +25.3%1992: +2.0%1993: +16.7%1994: +2.7%1995: +26.5%1996: +14.8%1997: +19.5%1998: +20.5%1999: +26.1%2000: -10.7%20002001: -12.2%2002: -15.4%2003: +32.6%2004: +14.3%2005: +8.9%2006: +17.3%2007: +8.0%2008: -34.1%2009: +27.5%2010: +14.6%20102011: -2.7%2012: +15.4%2013: +27.8%2014: +6.3%2015: -0.1%2016: +9.4%2017: +21.9%2018: -7.2%2019: +25.8%2020: +18.4%20202021: +17.8%2022: -17.8%2023: +21.4%2024: +16.2%2025: +20.8%

Any N-year period

Any N-year periodWorst10 % worse thanMedian10 % better thanBest
1 y (1192)−60.5 %−11.0 %+12.7 %+31.7 %+133.7 %
3 y (1168)−38.6 %−3.3 %+10.6 %+20.3 %+40.2 %
5 y (1144)−16.6 %+0.6 %+10.4 %+17.4 %+31.6 %
10 y (1084)−4.0 %+3.9 %+9.6 %+15.1 %+18.7 %
15 y (1024)+0.3 %+5.7 %+9.7 %+14.4 %+17.1 %
20 y (964)+2.3 %+6.8 %+10.0 %+13.5 %+15.9 %
30 y (844)+7.3 %+8.6 %+10.1 %+11.9 %+13.4 %

What we could not verify

Sources

Open in the builder

Put this card on your site →

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.