Portfolio 1

If you want maximum gains, go for our growth portfolio, which mainly uses Schwab-run ETFs. The funds in this basket feature the highest mix of stocks (80%) compared with bonds (20%). U.S. stocks have returned about 10% a year, on average, since 1926, including dividends. That trounces the long-term returns of bonds. But it's unusual for stocks to deliver the average return in any given year, and they have shown they can lose more than one-third of their value in short order. Buy this portfolio only if you won't sell in a panic during a market downturn, and aim to hold it for at least a decade.

Schwab Growth

The 80% allotment to stocks makes this our most-aggressive bundle. Schwab clients can build this portfolio, with its hefty stakes in small- and mid-cap ETFs, without paying commissions.

Name Ticker % of portfolio
  STOCKS   80%
  Schwab U.S. Large-Cap SCHX 25
  Schwab U.S. Small-Cap SCHA 25
  Schwab U.S. Dividend Equity SCHD 10
  SPDR S&P 400 Midcap Value MDYV 10
  Schwab International Equity SCHF 5
  Schwab International Small Cap Equity SCHC 5
  BONDS   20%
  Schwab U.S. Aggregate Bond SCHZ 15
  Pimco Investment Grade Corporate Bond Index CORP 5

Portfolio 2

If you're more risk-averse or plan to start withdrawing money in less than 10 years, choose our moderate or conservative portfolio. These baskets of ETFs hold considerably less in stocks than the growth portfolio, making them more stable. Our moderate-risk package features a lower stake in stocks (60%). It generates a decent yield (2.2%), thanks to ETFs that hold real estate investment trusts and corporate bonds. Fidelity customers can assemble this portfolio without paying brokerage fees.

Fidelity Moderate

Fidelity clients can assemble this well-balanced portfolio without incurring brokerage commissions. The package holds a bit more in stocks than the conservative portfolio and generates slightly less income. Expense ratios of the ETFs range from 0.03% to 0.15%.

Name Ticker % of portfolio
  STOCKS   60%
  iShares Core S&P Total U.S. Stock Market ITOT 20
  iShares Core MSCI Total International Stock IXUS 15
  Fidelity MSCI Real Estate Index FREL 10
  iShares Core S&P Small-Cap IJR 10
  iShares Core Dividend Growth DGRO 5
  BONDS   40%
  iShares Core U.S. Aggregate Bond AGG 30
  iShares iBoxx $ Investment Grade Corporate Bond LQD 10

Portfolio 3

In our conservative package, ETFs holding high-quality corporate and government bonds make up the largest slice of the pie (60%). With bond yields near record lows — and at negative levels in Europe and Japan — these ETFs don't pay much. But they help push the portfolio's income to about 2.5%, which isn't bad in a low-yield world. Moreover, high-quality bonds can be a bulwark against losses in stocks. This portfolio relies on Vanguard-sponsored ETFs, which don't cost a penny to trade if you're a Vanguard brokerage customer.

Vanguard Conservative

This package is for Vanguard clients who want some growth but don't want too much stock-market risk. If you want to cut risk even more, drop the small-cap ETF and cut the allocation to the foreign-stock ETF to 5%. Vanguard clients can buy the ETFs without paying commissions. Annual fees range from 0.05% to 0.15%

Name Ticker % of portfolio
  STOCKS   40%
  Vanguard Total Stock Market VTI 20
  Vanguard Total International Stock VXUS 10
  Vanguard High Dividend Yield VYM 5
  Vanguard Small Cap VB 5
  BONDS   60%
  Vanguard Intermediate-Term Corporate Bond VCIT 40
  Vanguard Total Bond Market BND 15
  Vanguard Total International Bond BNDX 5

Portfolio 4

For income investors, we recommend a mix of traditional bonds, preferred stocks and other income investments, aiming for a 5% yield. The portfolio may lose money, especially if interest rates rise or if the yield investments, such as real estate investment trusts and master limited partnerships, take a hit. But lower bond prices would push up yields, delivering more income over time. And some of the portfolio's yield investments, such as MLPs, may move up even as bond prices decline. Depending on which broker you use, you will have to pay commissions to trade some, if not all, of the ETFs in this portfolio.

One note: Most of the ETFs in this basket shell out income that is taxed at ordinary income tax rates. Your returns may be much higher if you can hold the portfolio in an IRA or other tax-sheltered account.

High-Income Combo

With ETFs from five sponsors, you'll pay commissions to buy some, if not all, of the funds in this portfolio. Of the four packages on these pages, this one is the most sensitive to swings in interest rates and would probably take the biggest hit if rates were to rise.

Name Ticker % of portfolio
  Schwab U.S. REIT SCHH 10
  Vanguard High Dividend Yield VYM 10
  iShares U.S. Preferred Stock PFF 15
  iShares Mortgage Real Estate Capped ETF REM 15
  Alerian MLP AMLP 10
  BONDS   40%
  Schwab U.S. Aggregate Bond SCHZ 30
  VanEck Vectors Fallen Angel High Yield Bond ANGL 10
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