Couch Potato Portfolio: the Risk X-Ray
The laziest portfolio in the catalog, by design: Scott Burns proposed it in a newspaper column as something an investor could manage 'with a table fork', one annual rebalance and no further decisions. Two funds, an even split, and a philosophy that simplicity itself compounds. The analysis below gives the fork-wielder the numbers the column never had: the true risk split, the drawdown history, and what the TIPS half actually absorbs.
Scott Burns, The Dallas Morning News (1991)
Analysis as of Friday 2026-08-28 · recomputed weekly from daily market data · methodology
What the Couch Potato Portfolio holds
The published allocation: Half stocks, half inflation-protected bonds, rebalanced once a year.
| Fund | Measured role | Weight | Expense ratio |
|---|---|---|---|
| VTI Vanguard Total Stock Market ETF | risk engine | 50% | 0.03% |
| TIP iShares TIPS Bond ETF | shock absorber | 50% | 0.18% |
Burns originally used a total-bond or inflation-linked fund depending on the era; the TIPS implementation is the common modern form.
Where the risk actually sits
The capital says one thing, the covariance another: VTI carries 87.6% of the portfolio's risk on 50.0% of its money, while TIP contributes just 12.4%.
| Fund | Share of risk | Risk | Capital | Beta | Role |
|---|---|---|---|---|---|
| VTI | 87.6% | 50.0% | 1.01 | risk engine 50% of the capital but 88% of the risk | |
| TIP | 12.4% | 50.0% | 0.05 | shock absorber |
How the pieces move together
| Holding | VTI | TIP |
|---|---|---|
| VTI 50% | 1.00 | |
| TIP 50% | 0.20 | 1.00 |
Pearson correlation of weekly returns · 156-week common window ending 2026-08-28 · pairbook.io
The worst it would have been
Over the analysis window, this mix would have fallen at worst -7.8% (from the week of 2025-02-21 to 2025-04-11), shallower than the S&P 500's -16.9% over the same weeks, and it has since recovered that peak.
Worst weeks of the mix: -4.3% (week ending 2025-04-11), -2.0% (week ending 2025-03-14), -1.8% (week ending 2024-09-13).
FAQ
Can two funds really be enough?
The effective-positions figure above answers precisely: with only two holdings and a low mutual correlation, this portfolio extracts most of the diversification a far longer holdings list would provide.
Why TIPS rather than regular bonds?
Burns wanted the safe half to defend purchasing power, not just nominal value. The correlation and drawdown figures show how differently TIP behaves from the stock half, which is the whole design.
Run this analysis on your own portfolio
The same X-ray, risk contributions, correlation blocks, ETF overlap, runs on any mix of 4,700+ US stocks and ETFs: paste your holdings into the free portfolio X-ray, or ask an AI assistant with the PairBook MCP server.
