Odd Lots Cullen Roche on the Art of Building a Perfect Portfolio
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Jan 12, 2026 
Cullen Roche, Founder and CIO of Discipline Funds and author of Your Perfect Portfolio, discusses modern portfolio construction. He critiques the traditional 60/40 portfolio in light of recent market challenges and highlights the importance of aligning assets to personal circumstances. Cullen dives into investor psychology during downturns and suggests that income stability determines risk capacity. He introduces the concept of the forward-cap approach, emphasizing macro trends and the simplicity of a three-fund model while advocating for tailored investment strategies.
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Design Portfolios Around The Person
- Build a portfolio that fits an individual, not a product you sell to clients.
- Customize allocations by assessing each person's unique needs and circumstances.
Don’t Trust Hypothetical Risk Answers
- Avoid relying on risk questionnaires that ask how you'd react to big drawdowns.
- Instead, use behavioral evidence and plan for how clients actually acted in past crises.
Origin Of 60/40 In The Great Depression
- The 60/40 portfolio likely traces to Wellington Fund's bond tilt during the Great Depression.
- Its resilience came from bonds cushioning equity drawdowns over many market cycles.
