Ultra Conservative Model Portfolio
Capital preservation first, growth second.
0–5 years
~5–10%
Retirees living off their savings, investors within five years of needing the money, or anyone who would panic-sell in a downturn.
Why This Allocation
At 20% equities, a repeat of the 2008 bear market would cost this portfolio roughly a single-digit loss, which most conservative investors can stomach. The heavy bond allocation — tilted toward inflation-protected and short-duration securities — is designed to preserve purchasing power while minimizing interest-rate sensitivity. The 10% cash reserve provides immediate liquidity and a buffer against having to sell assets at an inopportune moment. The tradeoff is that returns will be modest, and over multi-decade horizons the portfolio may only modestly outpace inflation.
Best for
- Money you need within five years
- Investors who cannot tolerate drawdowns
- Supplementing fixed income in retirement
Things to Consider
- Expected long-run returns barely outpace inflation
- Longevity risk: a very conservative portfolio may not sustain a 30-year retirement
- Interest-rate sensitivity should still be managed via short duration
Related Reading
Model portfolios are educational reference examples of common allocation strategies. They are not personalized investment advice. Your optimal mix depends on your individual age, income, goals, tax situation, and tolerance for risk.
Get a personalized allocation for your real accounts.
Alistair reads your actual holdings, compares them to the right target, and flags where you've drifted — free to start.
Try Alistair Free