Roger Gibson Talmud Portfolio: Allocations, Performance, and Returns Analysis
The Gibson Talmud Portfolio by Roger Gibson aims to diversify investments across US stocks, REITs and bonds.
The Gibson Talmud Portfolio strategy can be implemented with only 3 ETFs, of which 33.34% are US stocks, 33.33% are US REITs and 33.33% are mid-term treasury bonds. You do not need to pick individual stocks and bonds.
Accordingly to our backtests over the past 16 years, the Gibson Talmud Portfolio has the following performance metrics:
• Compound annual return (CAR): 6.62%;
• Standard deviation: 16.76%;
• Maximum drawdown (MDD): –45.02%;
• Sharpe ratio (with a risk-free rate of 3%): 0.22;
• CAR/MDD ratio: 0.15.
Who Is Roger Gibson
Roger is best known as the author of the investment classic, Asset Allocation: Balancing Financial Risk (McGraw-Hill). First published in 1989 and released in its fifth edition in 2013. It remains a bestselling book on asset allocation. The book has been published in German, Japanese, Korean, Chinese, Indian, and Russian editions.
Roger Gibson has been a frequent speaker at national and international conferences for investment professionals for 30 years. He is a steering group member and a past chairman of the Committee for the Fiduciary Standard, a group of leading financial advisors working to uphold stricter standards for all those providing investment advice.
Roger holds the professional designation of Chartered Financial Analyst (CFA) and earned his MBA from Carnegie Mellon University.
What Is The Gibson Talmud Portfolio
The Gibson Talmud Portfolio is a portfolio that is simple in structure and consists of the following asset classes:
- Stocks that make up 66.67% of the portfolio and include US large-cap stock and real estate investment trust (REIT) stocks;
- Bonds that make up the remaining 33.33% of the portfolio and include only medium-term treasury bonds.
The asset allocation of The Gibson Talmud Portfolio is as follows:
| Asset Class | Weight In The Portfolio |
| Total U.S. Stock Market | 33.34% |
| U.S. REITs | 33.33% |
| Intermediate-Term Treasury Bonds | 33.33% |
Stocks In The Gibson Talmud Portfolio
Stocks are used as high-return securities that increase portfolio returns, but stocks are more volatile than bonds.
The Gibson Talmud Portfolio includes the following types of stocks:
- Total U.S. Stock Market – US large-cap growth and value stocks that virtually replicate the benchmark S&P 500 stock index;
- Real estate investment trust (REIT) stocks – these stocks historically have a low correlation with the S&P 500 stock index.
For stocks, we have picked these ETFs, which are well diversified, have high liquidity and a long performance history:
| Asset Class | ETF Name | ETF Ticker |
| Total U.S. Stock Market | Vanguard Total Stock Market Index Fund | VTI |
| U.S. REITs | Vang |