Margaritaville Portfolio: backtest, returns and drawdowns
A third each in US stocks, international stocks and inflation-protected Treasuries.
Data updated October 2026
Created by: Scott Burns
Allocation
| Asset class | ETF used in the backtest | Weight |
|---|---|---|
| US total stock market | ITOT | 33.3% |
| International stocks | VXUS | 33.3% |
| Inflation-protected Treasuries (TIPS) | TIP | 33.3% |
- Stocks 66.7%
- Bonds 33.3%
From October 2011 to October 2026 the Margaritaville Portfolio returned 8.2% a year on average, with annual volatility of 10.9%. Its deepest fall was 23.8%, from February 2020 to March 2020, recovered in about 6 months.
Its best year was 2019 (+20.3%) and its worst 2022 (−15.9%).
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
- 10.9%
- Maximum drawdown
- −23.8%
- Recovery time
- 6 months
- Sharpe
- 0.64
- Sortino
- 0.89
- Worst year
- 2022: −15.9%
- Positive years
- 11/14
Growth of $10,000
Drawdowns
Returns by calendar year
| Year | Margaritaville Portfolio | 60/40 Portfolio | 100% Stocks |
|---|---|---|---|
| 2026(partial) | +7.6% | +6.9% | +12.7% |
| 2025 | +18.7% | +13.0% | +17.0% |
| 2024 | +10.2% | +14.8% | +23.8% |
| 2023 | +15.3% | +17.9% | +26.1% |
| 2022 | −15.9% | −16.9% | −19.5% |
| 2021 | +13.5% | +14.6% | +25.7% |
| 2020 | +14.1% | +15.4% | +20.7% |
| 2019 | +20.3% | +21.9% | +30.7% |
| 2018 | −7.1% | −3.1% | −5.3% |
| 2017 | +17.3% | +14.2% | +21.4% |
| 2016 | +7.2% | +8.3% | +12.1% |
| 2015 | −2.0% | +0.2% | −0.1% |
| 2014 | +3.7% | +9.7% | +12.2% |
| 2013 | +12.6% | +18.2% | +31.8% |
| 2012 | +13.2% | +10.4% | +14.7% |
| 2011(partial) | +1.7% | +3.1% | +4.1% |
History
- Created by
- Scott Burns
- Who
- Personal finance columnist
- Year
- 2000s
- Source
- Scott Burns’ columns
- Funds in the backtest
- 3
The Margaritaville is another of Scott Burns’ lazy portfolios, an evolution of his Couch Potato. It splits money into three equal parts: US stocks, international stocks and inflation-protected Treasuries (TIPS).
Compared with the Couch Potato it adds international diversification and swaps ordinary bonds for TIPS, whose principal rises with inflation – protection that matters most for long-term savers and retirees.
Strengths and weaknesses
Strengths
- Three equal parts
- Global stocks
- TIPS protect a third of the portfolio against inflation
Weaknesses
- International stocks lagged US stocks in the 2010s
- TIPS fall when real interest rates rise, as in 2022
- Two thirds in stocks
How it works
The Couch Potato with global stocks and inflation-linked bonds instead of ordinary ones.
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 Margaritaville Portfolio?
Scott Burns (personal finance columnist), 2000s. Source: Scott Burns’ columns.
What is the Margaritaville Portfolio?
A third each in US stocks, international stocks and inflation-protected Treasuries. Allocation: 33.3% us total stock market, 33.3% international stocks, 33.3% inflation-protected treasuries (tips). Created by: Scott Burns.
What is the Margaritaville Portfolio return?
In the backtest from October 2011 to October 2026 it returned 8.2% a year on average, with a maximum drawdown of 23.8%. 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 Margaritaville Portfolio?
23.8%, from February 2020 to March 2020; it took about 6 months to get back to the previous high.
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- Versione italiana
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.