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Guidelines for Achieving Broad Portfolio Diversification

The 7Twelve® Portfolio

7Twelve is a multi-asset balanced portfolio developed by Craig L. Israelsen, Ph.D. in 2008. Unlike a traditional two-asset 60/40 balanced fund, the 7Twelve balanced strategy utilizes multiple asset classes to enhance performance and reduce risk.

The 7 of 7Twelve represents the suggested number of asset classes to include in your portfolio. The Twelve represents the 12 separate mutual funds or exchange traded products to fully represent the 7 asset classes in your 7Twelve portfolio. Our portfolio has approximately a 65/35 allocation: approximately 65% of the portfolio is invested in equity and diversifying assets and about 35% invested in bonds and cash.

Introduction to the 7Twelve Portfolio

Each mutual fund (or "sub-asset") in the 7Twelve strategy is equally weighted, meaning that each fund represents 1/12th of the portfolio. This allocation is maintained by rebalancing the portfolio back to equal portions annually, quarterly or monthly.

7Twelve can represent the "core" of any portfolio. A financial advisor should not be spending time designing a portfolio core for every client. Rather, the advisor should be determining how much of the pre-designed core to utilize for each client and what type of individualized "explore" assets to add around the "core" to best meet the client’s unique needs and circumstances. Using 7Twelve as the core portfolio ingredient can enhance the efficiency of a financial advisor and the portfolio performance for the investor.

The 7Twelve portfolio is a strategic model – meaning that it does not rely on tactical changes. The "core" 7Twelve portfolio is a broadly diversified portfolio with equal allocations to all 12 mutual funds (or ETFs) all of the time. Additionally, there are "age-based" versions of the 7Twelve model where all 12 mutual funds are utilized, but not in equal allocations.

Several suggested documents:

  1. Click here to download "An Introduction to 7Twelve."
  2. Click here to purchase 7Twelve Portfolio Reports.
  3. Click here to download Monthly 7Twelve Performance Updates.
  4. Click here to download the 7Twelve Performance Graphs.
  5. Click here to download an article about "Benchmarking: The Art of the Science," AAII Journal, November 2019.
  6. Click here to download the "The $12 Portfolio".
  7. Click here to download "Three Essential Points for All Investors".
  8. Click here to download "Keeping Portfolio Costs Low".
  9. Click here to download the S&P 7Twelve Index.
  10. Click here to download information about 7Twelve Partners (for financial advisors only).
  11. Click here to go to the 7Twelve Portfolio Library.
  12. Click here to download a 7Twelve video presentation by Craig Israelsen on the 7Twelve Portfolio, University of Missouri (a YouTube video).
   
What Is 7Twelve?
7Twelve Model
7Twelve Performance
The Rationale
Historical Performance

Popular Documents
"An Introduction to 7Twelve."
Purchase 7Twelve Portfolio Reports.
Monthly 7Twelve Performance Updates
7Twelve Performance Graphs
"Benchmarking: The Art of the Science," AAII Journal
"The $12 Portfolio"
"Three Essential Points for All Investors"
"Keeping Portfolio Costs Low"
S&P 7Twelve Index
7Twelve Partners (for financial advisors only)
7Twelve Portfolio Library
7Twelve Presentation at the University of Missouri
Go, Portfolio. Go!
"Building a Better Nest Egg," Christopher M. Wright, Real Estate Investment Today, May/June 2011.

Do you have these publications in YOUR library?
The 7Twelve Report
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7Twelve: A Diversified Investment Portfolio with a Plan
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Your Nest Egg Game Plan