Benjamin Graham 50/50 Portfolio: backtest, returns and drawdowns
Half in stocks, half in high-grade bonds: the starting point Graham gave the defensive investor.
Data updated October 2026
Created by: Benjamin Graham (1949)
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US stocks | ITOT | 50% |
| US investment-grade bonds | BND | 50% |
- Stocks 50%
- Bonds 50%
From October 2011 to October 2026 the Benjamin Graham 50/50 Portfolio returned 8.2% a year on average, with annual volatility of 8.9%. Its deepest fall was 20.7%, from November 2021 to October 2022, recovered in about 28 months.
Its best year was 2019 (+19.8%) and its worst 2022 (−16.3%).
Over the same period 100% US stocks returned 14.3% a year with a maximum fall of 35.0%.
Key figures
- Annual return (CAGR)
- +8.2%
- Annual volatility
- 8.9%
- Maximum drawdown
- −20.7%
- Recovery time
- 28 months
- Sharpe
- 0.76
- Sortino
- 1.07
- Worst year
- 2022: −16.3%
- Positive years
- 12/14
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Benjamin Graham 50/50 Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +5.5% | +6.9% | +12.7% |
| 2025 | +12.0% | +13.0% | +17.0% |
| 2024 | +12.6% | +14.8% | +23.8% |
| 2023 | +15.9% | +17.9% | +26.1% |
| 2022 | −16.3% | −16.9% | −19.5% |
| 2021 | +11.8% | +14.6% | +25.7% |
| 2020 | +14.1% | +15.4% | +20.7% |
| 2019 | +19.8% | +21.9% | +30.7% |
| 2018 | −2.6% | −3.1% | −5.3% |
| 2017 | +12.5% | +14.2% | +21.4% |
| 2016 | +7.3% | +8.3% | +12.1% |
| 2015 | +0.2% | +0.2% | −0.1% |
| 2014 | +9.0% | +9.7% | +12.2% |
| 2013 | +14.8% | +18.2% | +31.8% |
| 2012 | +9.3% | +10.4% | +14.7% |
| 2011(partial) | +2.8% | +3.1% | +4.1% |
History
- Created by
- Benjamin Graham
- Who
- Investor, author and Warren Buffett’s teacher
- Year
- 1949
- Source
- The Intelligent Investor (1949)
- Funds in the backtest
- 2
Benjamin Graham, the father of value investing and Warren Buffett’s teacher at Columbia, wrote in The Intelligent Investor (1949) that a “defensive investor” should never hold less than 25% or more than 75% in stocks, and should start from an even split with high-grade bonds.
He suggested moving away from 50/50 only when stocks looked clearly cheap or clearly expensive, and otherwise restoring the balance whenever market moves pushed the stock share a few points off – for example selling stocks when they reached 55%.
Strengths and weaknesses
Strengths
- Two funds, half and half
- A clear rebalancing rule
- Moderate swings
Weaknesses
- Half in bonds limits long-term growth
- Stocks and bonds can fall together, as in 2022
- No international stocks or real assets
How it works
Keep an even split and rebalance when market moves push it a few points off, leaning away from 50/50 only at clear extremes.
Backtest with total-return ETF prices (dividends reinvested), rebalanced to target weights on the first trading day of each year. Where a Vanguard fund has a short price history in our data, an iShares fund on the same market is used (for example ITOT for VTI, IVV for VOO). No fees, taxes or currency effects; first and last years are partial. Past results do not predict future returns.
Questions
Who created the Benjamin Graham 50/50 Portfolio?
Benjamin Graham (investor, author and Warren Buffett’s teacher), 1949. Source: The Intelligent Investor (1949).
What is the Benjamin Graham 50/50 Portfolio?
Half in stocks, half in high-grade bonds: the starting point Graham gave the defensive investor. Allocation: 50% us stocks, 50% us investment-grade bonds. Created by: Benjamin Graham (1949).
What is the Benjamin Graham 50/50 Portfolio return?
In the backtest from October 2011 to October 2026 it returned 8.2% a year on average, with a maximum drawdown of 20.7%. US dollars, before fees and taxes.
How often should it be rebalanced?
The backtest rebalances once a year back to the target weights. Rebalancing more often changes little and adds costs; some investors rebalance only when a weight drifts beyond a threshold.
What was the worst drawdown of the Benjamin Graham 50/50 Portfolio?
20.7%, from November 2021 to October 2022; it took about 28 months to get back to the previous high.
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Source: MarketStack end-of-day prices. Historical and educational content: not a forecast and not investment advice. MEDGE Capital does not recommend buying or selling any instrument. Risk disclaimer.