2018 - 2025 Model Portfolio Performance

As promised last post, I've done the calcs on my Model Portfolio performance for last year, and wish to present this to all readers.

The end of last year, 2025 completed 8 years of using my model portfolio for investing, so the data covers 2018 through 2025. Here are the results in a table which I will discuss next. They are cumulative results over those time-frames.

  
 My model portfolio had an excellent 2025, up 23.15%. The fully invested S&P 500 that we compare against rose +27.6%. My table above also shows the 3, 5 and 8-year performances of Model vs. the market. 

The goal of my model portfolio is to offer investors a diversified way to allocate their money to attempt to achieve positive returns over time, outpacing inflation to grow their money, without a large draw-down in principle. Constructing portfolios for over 40 years for all types of investors, I'll state that this 'system' should suit 90% of all investors who can bear some risk with their principal. It should be used with other investments and savings based outside of this using your risk profile.

The S&P 500 gained more than my model portfolio in all time periods, as the stock market rose quite a bit over that time; up 150% in 8 years. My model rose +96%. My model portfolio normally holds three types of investments each month; Stocks, Bonds and Gold. It also owns cash that is not invested in the three assets. 

So usually, in an up market period, the Model will lag the stock market, depending on the performance of the bonds and Gold. This diversification aids in the smoothing out of the Models performance, so as not to experience big price swings up and draw-down. In a down market, the model portfolio usually declines less, or even gains - due to its cash and bond holdings. Also, Gold tends to move opposite stocks in down (bear) markets, offsetting stock losses.

That leads to the next point I mentioned in the last paragraph; draw-down. What does this look like? The table below shows the results of my diversified Model portfolio vs. the all stock S&P 500 Index. 

There were three notable periods in the 8-years with substantial sell-offs in stock prices; ranging from -14% to -20% on a monthly ending basis. The largest draw-down on a monthly basis was -6% to -12%. So what's the big deal you say? When you lose 20% of your values - on paper - you tend to make 'foolish' decisions; like selling out. That $500,000 nest egg is now a $400,000 one in just three months in early 2020.

The math to get back to even bears another salient stat. A 12% loss needs a +13.6% gain to get back to even. A 20% decline needs a +25% gain to get back to even. Some bear market's prior to 2020 have been more severe, but I don't have data on that to compare with my model portfolio.

The summary lesson here is to lessen the risk of owning stocks by owning other investments that are less correlated with stocks; like bonds and Gold. 

Being up 150% in 8 years sounds like a no-brainer accomplishment by just owning the S&P 500 Index and never selling IF you have the stomach for the draw-downs. A more balanced approach to consider is diversification around your stock holdings to reduce risk, smaller draw-downs, some liquidity for withdrawals, and a better nights sleep. On an annual compound growth basis, here's the tally.

 S&P 500 Index;  +12.14% average annual growth
 Model Portfolio;  + 8.80%  average annual growth

Call it +9% model vs. +12% S&P in round numbers. Inflation averaged +3.47% per year over the 8 years, so both showed positive gains after consumer price rises were factored in.

I hope this helps you understand my Model Portfolio strategy better.

I'll try to update this every 3 months or so on this blog. 

Thanks for reading!

~Barry

P.S. January was a banner month here to start 2026; My Model gained +4.19% vs. the S&P 500 at +1.47%, chiefly due to the big rise in Gold and Silver prices on those investments held in the model portfolio. February calculations are not ready just yet; I'll report them end of March to sum up the 1st quarter of this year.

This is my 154th blog post in 20 years, having started on Google blogger in December, 2005. The Dow Industrial Average stood at 10,717 back then! Time flies they say!