Bogleheads On Investing Podcast · Sep 27, 2026 · 39m · 23m saved
With Peter Lazaroff, CIO of Plancorp and author of The Perfect Portfolio
Stocks have returned about 7% a year after inflation going back to 1800, Peter Lazaroff said, citing data from Jeremy Siegel and Jeremy Schwartz, while bonds have returned roughly 1% to 3%.
Bonds are usually treated as the lower-risk holding because their prices move less from day to day. Lazaroff said that depends on how risk is defined, and that over 20 or 30 years the lower return is a risk of its own.
"So, you're like knowingly accepting 4 percentage points less of long-term growth when you allocate to bonds."
Peter Lazaroff, chief investment officer at Plancorp, on the Bogleheads On Investing Podcast. He said the firm manages over $10 billion for clients across the country, he has worked in the business for 20 years, and he hosts the podcast The Long Term Investor. His new book, The Perfect Portfolio, sets out how he builds portfolios, including his own.
The full interview is covered here so you can skip it. 39 minutes of audio, 15 minutes of reading.
Here are the 9 principles that matter.
Key Takeaways
The perfect portfolio is the one an investor can hold for decades, not the one with the highest expected return
Plancorp leaves a pending inheritance out of a client's financial plan until the money actually belongs to them
How an investor behaved in 2008, 2020 and 2022 says more than a risk questionnaire
Questionnaire answers change with the market, he said
The story attached to a decline scares investors more than its size
Owning bonds means accepting about 4 percentage points less long-term growth, by his reading of data going back to 1800
Neither index funds nor factor funds are better; factor funds explain more of returns but carry more risk
A bond fund held longer than its duration comes out ahead when rates rise
Duration is the number of years it takes to break even after a change in rates
He holds his own retirement savings in one all-stock global fund, even though it costs more than building the same portfolio himself
1. One Book, Not Seven
The host asked why Lazaroff wrote a book about the perfect portfolio.
Clients ask for one book, and he has had to name several
He said managing over $10 billion for clients is different from educating the public. People regularly ask him for a single book that would explain his philosophy.
"I feel like I have to give them six or seven different books here." — Peter Lazaroff
He said the classics predate behavioral finance and other ideas that did not exist when they were written. He wanted a book that uses modern examples, is "not 400 pages long," and covers the main points for beginners and long-time students of the market alike.
The host said his own favorite for people starting out is Jack Bogle's The Little Book of Common Sense Investing.
