BiggerPockets Money Podcast

Episode: Scott Builds Four Portfolios with Four Different Strategies ($40k Experiment)

Date: December 30, 2025
Hosts: Mindy Jensen and Scott Trench

Episode Overview

In this episode, the BiggerPockets Money Podcast embarks on a hands-on experiment: Co-host Scott Trench invests $40,000 across four separate portfolios—each built with distinct strategies, allocations, and underlying investment philosophies. The goal? To transparently demonstrate the real-life mechanics and eventual outcomes of each approach, from the tried-and-true index fund to a custom, valuation-conscious “market timing” portfolio. Over time, the show will update listeners on performance, offering a rare real-world comparison for FIRE (Financial Independence, Retire Early) enthusiasts and serious investors alike.

Key Topics & Discussion Points

1. Experiment Structure & Objectives

• Four Portfolios: Each receives $10,000, invested through public.com (BiggerPockets Money sponsor and partner).
• Purpose: Side-by-side, real-money comparison of four investment strategies, from basic to advanced, passive to active.
• Ongoing Updates: Results will be tracked and shared quarterly in the newsletter and occasionally on the podcast.

Notable Quote:
“What if you could see exactly how different investment strategies perform side by side in real time with real money? That’s exactly what we're doing in today’s episode.”
— Mindy Jensen (00:00)

2. Portfolio #1: 100% S&P 500 Index Fund (VOO)

• Strategy: Pure exposure to largest US companies via a low-fee ETF.
• Mechanics:
  • Account setup and instant deposit to public.com.
  • $10,000 purchase of VOO via market order.
• Concept: This is the “default” path for many index investors—simple, broad, and low-cost.

Notable Moment:
“I now am the proud owner of the United States economy. The S&P 500, the 500 largest companies that make up the S&P 500.”
— Scott Trench (05:03)

• Discussion: Weightings favor larger companies (e.g., more Apple, less Best Buy).

3. Portfolio #2: The Classic 60/40 Stock-Bond Portfolio

• Strategy: Balanced, following the “4% rule” and supported by Bill Bengen’s research.
• Allocation:
  • 60% Vanguard Total Stock Market ETF (VTI): $6,000
  • 40% Vanguard Total Bond Market ETF (BND): $4,000
• Purpose: Lower volatility and serve as a gold standard for retirement planning.

Notable Quote:
“Bonds are insurance. They’re going to dampen the volatility of my portfolio.”
— Scott Trench (07:53)

• Process: Instant transactions, highly liquid funds, immediate (albeit minor) value fluctuations.

4. Portfolio #3: Risk Parity Portfolio (The Frank Vasquez Approach)

• Background: Mirrors a previously constructed portfolio by Mindy, with performance comparisons starting from different market cycles.
• Allocation:
  • 42% Stocks (split between Vanguard Growth ETF [VUG] and Avantis US Small Cap Value ETF [AVUV])
  • 26% Bonds (half Intermediate: VGIT, half Long-term: VGLT)
  • 16% Gold (GLDM)
  • 10% Managed Futures (DBMF)
  • 6% International Stocks (split between IDMO and AVDV)
• Purpose: Enhance withdrawal safety; reduce sequence-of-returns risk for retirees by diversifying across uncorrelated assets.

Notable Quotes:

• “Gold has a really good volatility dampening effect on a portfolio.”
  — Scott Trench (17:32)

• “My best performing holding in this account? …It's gold. And it still goes up and I don’t like gold.”
  — Mindy Jensen (18:18)

• Routine: Annual rebalancing, periodic withdrawals in Mindy’s version; Scott sets his to “let ride.”

5. Portfolio #4: Scott’s “Market Timing” Thesis Portfolio

• Objective: Explore alternatives for investors uncomfortable with current high US stock valuations.
• Scott’s Perspective:
  • Feels the S&P 500 is “too expensive” by historical standards (high Shiller PE, high price-to-sales, etc.).
  • Seeks a way to stay invested while waiting for fairer prices, with rules for rotating back into the S&P 500.
• Allocation:
  • 30% Bonds (BND)
  • 20% Real Estate Investment Trusts (VNQ)
  • 30% US Value Stocks (AVUV)
  • 20% International Value Stocks (AVDV)
• Rules for Rotation Back to S&P 500 (VOO):
  1. Move 25% of portfolio to VOO or VTI if Shiller PE falls below 25.
  2. Move all assets to VOO if Shiller PE goes below 20, Buffett Indicator below 125%, or price/sales below 1.7.
  3. (Added on Mindy's suggestion) Reverse out if valuations soar again, to avoid hasty, irrational decisions.

Notable Quotes:

• “This is not a ‘please invest in this portfolio’…this is a thesis for feedback.”
  — Scott Trench (20:47)

• “The stock market is so far out of its historical range by almost every valuation metric that I can hear about…in this portfolio, I’m putting on the hat of somebody who’s uncomfortable with that…”
  — Scott Trench (30:27)

• “This is entertainment purposes only. And with that said, I’m going to go ahead and transact in this portfolio here and we’re going to see how it, how it does so you can all laugh at me as the years go by.”
  — Scott Trench (32:53)

• Philosophical Discussion:

  • Mindy expresses trust in tried-and-true index investing, citing decades of riding out market crashes (e.g., 1990s, 2008, COVID).
  • Scott admits his lack of experience through major crashes (2000, 2008) makes him more cautious and “anxious-lite.” (40:44)
  • Both agree: Your portfolio should reflect your emotional comfort and your life phase (e.g., withdrawal vs. accumulation).

Notable Quotes & Memorable Moments

• “That’s investing...now I’m down a dollar. So that’s it. That’s the first account.”
  — Scott Trench, on immediate market fluctuations (05:35)

• “I think that everybody has to go through their first recession at one point. It’s not exciting to see your stock portfolio keep going down and down…”
  — Mindy Jensen (41:12)

• “I do not understand the stock market right now. I just don’t, I don’t get it. I don’t understand why it’s trading at these levels here.”
  — Scott Trench (43:41)

Timestamps for Key Sections

• [00:00] — Introduction & Purpose
• [03:07] — Portfolio 1: 100% S&P 500 Index Fund (VOO)
• [06:03] — Portfolio 2: 60/40 Stock-Bond Portfolio (VTI/BND)
• [12:39] — Portfolio 3: Risk Parity (multi-asset, diversified)
• [20:47] — Portfolio 4: Scott’s Market Timing Thesis
• [31:38] — Setting Rules for Behavioral Consistency
• [40:44] — Personal Reflections on Experience and Emotional Investing

Flow & Tone

The episode is hands-on, playful, and candid. Both hosts are transparent about their biases, experience, and comfort zones. The banter is supportive but honest—showing Mindy as the battle-tested index investor and Scott as the cautious, research-driven experimenter.

Takeaways for Listeners

• No One-Size-Fits-All: Even two experts at the same firm choose different approaches based on risk tolerance, beliefs, and experience.
• Mechanics Matter: Setting up and allocating portfolios is easier than most investors think. Index funds are especially user-friendly.
• Diversification Is Key, But So Is Sleep: Emotional fit and ability to “sleep at night” should drive allocation.
• Experimentation (with a Disclaimer!): It’s possible to try out theses with a sliver of your portfolio, but always do so with a clear plan and self-awareness.
• Track, Learn, Iterate: The show will follow these portfolios and share honest, data-driven updates to help listeners learn from real outcomes.

Final Thoughts

Neither Scott nor Mindy offer investment advice. Instead, they showcase how to build, test, and reflect on investment strategies—reminding listeners to tailor their approach to their own comfort and goals, while learning from both research and lived experience.