Bill Schultheis Coffeehouse Portfolio
Background
The Coffeehouse Portfolio was created by Bill Schultheis, a financial advisor and author of The Coffeehouse Investor. Introduced in the late 1990s, the strategy was Schultheis’s response to the noise and complexity that dominate much of the investment world. His philosophy emphasized simplicity, discipline, and faith in long-term market returns. The name “Coffeehouse” reflects the idea of an investing approach simple enough to explain over a casual cup of coffee—straightforward, low-cost, and focused on what truly matters: diversification, asset allocation, and staying the course.
Primary Goals
The primary goal of the Coffeehouse Portfolio is to achieve steady, long-term growth through broad diversification while minimizing emotional decision-making and investment costs. Schultheis believed that most investors can succeed by avoiding speculation, reducing complexity, and focusing on a sensible mix of index funds. A secondary goal is behavioral simplicity—creating a plan that investors can easily understand and stick with, regardless of market conditions.
The design of the Coffeehouse Portfolio reflects balance across different economic environments:
- Economic expansion: A diversified mix of U.S. and international equities participates in global growth and rising corporate profits.
- Inflationary environments: Stock ownership and exposure to real assets provide some protection against rising prices over time.
- Recession or deflation: A significant allocation to high-quality bonds helps preserve capital and stabilize returns.
- Market volatility: Broad diversification across multiple stock styles and asset classes reduces concentration risk and promotes investor discipline.
The portfolio’s philosophy rests on three timeless investing principles: own a diversified mix of assets, keep costs low, and stay invested for the long term.
Construction
The Coffeehouse Portfolio divides assets across seven distinct asset classes, with roughly 60% allocated to equities and 40% to bonds. Each equity category represents a unique slice of the market, providing diversification across size, style, and geography:
- U.S. large-cap stocks: Provide core exposure to established American companies and overall economic growth.
- U.S. large-cap value stocks: Add exposure to companies with strong fundamentals trading at lower valuations.
- U.S. small-cap stocks: Capture higher expected returns from smaller, more dynamic companies.
- U.S. small-cap value stocks: Combine the small-company premium with value characteristics for further diversification.
- International stocks: Expand equity exposure globally across developed markets, reducing dependence on the U.S. economy.
- Real estate (REITs): Provide exposure to income-producing commercial real estate and offer a partial hedge against inflation.
- Bonds: Supply income and stability, balancing the equity risk and providing protection during downturns.
By combining multiple segments of the stock market with a stable bond allocation, the Coffeehouse Portfolio creates a balanced framework that emphasizes discipline over prediction. Its mix of growth, value, and income-oriented assets reflects a pragmatic belief that long-term success comes not from finding the next big winner but from owning the market patiently, consistently, and inexpensively.
Performance & Returns
Total Return by Period
Updated: Nov 14, 2025
| 1 Day | 1 Week | 28 Days | 90 Days | 1 Year | 3 Years | 5 Years | 10 Years |
|---|---|---|---|---|---|---|---|
| -0.10% | -0.17% | -0.39% | 1.90% | 5.25% | 20.84% | 19.12% | 51.67% |
Total Return by Year
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|
| 7.54% | 11.47% | -13.77% | 13.61% | 9.24% | 18.67% | -4.93% | 10.75% | 9.50% | -0.66% |
10 Year Performance
| Total Return | Annualized Return | CAGR | Max Drawdown | Sharpe Ratio | Sortino Ratio | Calmar Ratio | Ulcer Index |
|---|---|---|---|---|---|---|---|
| 51.67% | 4.80% | 4.26% | -32.95% | 0.16 | 0.19 | 0.15 | 0.08 |
Asset Allocation
| Symbol | Description | Weight % |
|---|---|---|
| VV | Vanguard Large-Cap ETF | 10.0 |
| VTV | Vanguard Value ETF | 10.0 |
| VB | Vanguard Small-Cap ETF | 10.0 |
| VBR | Vanguard Small-Cap Value ETF | 10.0 |
| VXUS | Vanguard Total International Stock ETF | 10.0 |
| VNQ | Vanguard Real Estate ETF | 10.0 |
| BND | Vanguard Total Bond Market ETF | 40.0 |
Total Return Graph
No Taxes, No Rebalancing.
Comparisons with Other Portfolios
- Bill Schultheis Coffeehouse Portfolio vs Harry Brown Permanent Portfolio
- Bill Schultheis Coffeehouse Portfolio vs Bogleheads Three Fund Portfolio
- Bill Schultheis Coffeehouse Portfolio vs Rick Ferri Core Four Portfolio
- Bill Schultheis Coffeehouse Portfolio vs William Bernstein's Coward Portfolio
- Bill Schultheis Coffeehouse Portfolio vs Couch Potato Portfolio