Armstrong Ideal Index
0.50%April 16 | MyPlanIQ portfolio symbol P_20546

  • Portfolio Overview
  • Asset Allocation and ETFs
  • Performance
  • Calculators
  • Rolling Returns
  • Drawdowns

Portfolio Overview


Armstrong Ideal Index: Comprehensive Overview

1. Background and Philosophy

The Armstrong Ideal Index was created by Frank Armstrong, a renowned financial advisor and author of The Informed Investor. Armstrong advocates for a passive, low-cost investing approach, emphasizing diversification across asset classes and reliance on index funds to eliminate manager risk. His philosophy centers on:

  • Market efficiency: Avoids active management in favor of broad market indices.
  • Small-cap and value tilts: Historically, these segments have outperformed large-cap and growth stocks over the long term.
  • Simplicity: Designed as a "lazy portfolio" with minimal rebalancing.

2. Asset Allocation Analysis

The portfolio is allocated as follows:

  • U.S. Equities (31%):
    • VISVX (9.25% Small Cap Value)
    • VIVAX (9.25% Large Cap Value)
    • VISGX (6.25% Small Cap Growth)
    • VFINX (6.25% S&P 500)
    Pros: Diversified across market caps with a value tilt. Cons: Overweight in small caps may increase volatility.
  • International Equities (31%):
    • VGTSX (Total International)
    Pros: Broad exposure to developed and emerging markets. Cons: No explicit emerging markets overweight.
  • REITs (8%):Pros: Inflation hedge and diversification. Cons: Potentially underweighted.
  • Bonds (30%):Pros: Reduces overall portfolio risk. Cons: Lower yield potential.

Risk Level: Aggressive (70% equities), suitable for long-term investors with higher risk tolerance.

3. Practical Application for Retirement Accounts

For 401(k) Plans:

  • Step 1: Identify equivalent funds in your 401(k) by matching the asset class and index (e.g., S&P 500, small-cap value).
  • Step 2: If exact funds (e.g., VISVX) are unavailable, use:
    • Broader U.S. equity funds for small-cap/value allocations.
    • Total international funds for VGTSX.
    • Short-term bond funds for VBISX.
  • Step 3: If REITs (VGSIX) are unavailable, allocate to equities or a real estate sector fund.

For IRAs:

Investors can directly replicate the portfolio using the suggested ETFs (e.g., SCZ, SPY, BND) for greater flexibility and lower costs.

Key Takeaway: The Armstrong Ideal Index is a low-maintenance, diversified portfolio ideal for investors seeking long-term growth with a tilt toward small-cap and value stocks. Its simplicity makes it adaptable to most retirement accounts.

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Asset Allocation


Symbol Category/Sector Target Weight
VISVX
VANGUARD SMALL-CAP VALUE INDEX FUND INVESTOR SHARES 		US Equity 13.82%
VIVAX
VANGUARD VALUE INDEX FUND INVESTOR SHARES 		US Equity 7.95%
VISGX
VANGUARD SMALL-CAP GROWTH INDEX FUND INVESTOR SHARES 		US Equity 7.46%
VFINX
VANGUARD 500 INDEX FUND INVESTOR SHARES 		US Equity 4.47%
VGSIX
VANGUARD REIT INDEX FUND INVESTOR SHARES 		Real Estate 15.38%
VGTSX
VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND INVESTOR SHARES 		International Equity 28.34%
VBISX
VANGUARD SHORT-TERM BOND INDEX FUND INVESTOR SHARES 		Fixed Income 22.58%


Historical Performance


The return data shown below all delayed by 3 months. Their latest dates are all the same: 01/31/2025.
AR inception is since 01/01/2007.
Name YTD Return 1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR 20Yr AR Inception
Armstrong Ideal Index 2.39% 11.00% 3.51% 5.68% 5.45% 6.61% NA 5.08%
VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) 2.77% 26.20% 11.74% 15.10% 13.50% 14.13% 10.53% 10.43%
VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) 2.11% 12.75% 4.27% 6.43% 6.23% 7.14% 6.01% 5.55%

Armstrong Ideal Index Return Calculator

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Calculators


Dollar Cost Average Calculator for Armstrong Ideal Index

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Rolling Returns


From 01/01/2007 to 04/16/2025, the worst annualized return of 3-year rolling returns for Armstrong Ideal Index is -4.43%.

From 01/01/2007 to 04/16/2025, the worst annualized return of 5-year rolling returns for Armstrong Ideal Index is -0.2%.

From 01/01/2007 to 04/16/2025, the worst annualized return of 10-year rolling returns for Armstrong Ideal Index is 3.98%.


Maximum Drawdown

Armstrong Ideal Index Maximum Drawdown