Conservative 7-fund portfolio: 40% bonds, 60% equities diversified across large, small, value, international, and REITs.

Who created the Coffeehouse strategy?

Coffeehouse was developed by Bill Schultheis. It is based on Schultheis, B. The Coffeehouse Investor (1998).

What is the historical return and maximum drawdown of Coffeehouse?

Backtested from 1987-12-31 to 2026-07-03, Coffeehouse returned 8.6% CAGR with a -38.3% maximum drawdown and a Sharpe ratio of 0.93. Past performance does not guarantee future results.

How often is Coffeehouse rebalanced?

Coffeehouse is rebalanced annual. BestFolio publishes the updated allocation signal each period.

Is Coffeehouse a fixed or tactical strategy?

Coffeehouse is a fixed-allocation (strategic) portfolio: it holds a set allocation and rebalances on schedule rather than rotating based on market signals.

Coffeehouse Strategy by Bill Schultheis

Name: Coffeehouse, Backtest Time Series
Creator: BestFolio
License: https://creativecommons.org/licenses/by-nc/4.0/

Coffeehouse at a glance

Coffeehouse is a fixed-allocation portfolio by Bill Schultheis across US Large-Cap Equity, US Large-Cap Value, US Small-Cap Equity, US Small-Cap Value, rebalanced annual. Backtested 1987-12-31 to 2026-07-03 (38.5 years): 8.6% CAGR, 0.93 Sharpe, -38.3% max drawdown, 10.7% volatility.

Type: Fixed Allocation
Author: Bill Schultheis
Rebalancing: Annual
Risk: Moderate
Period: 1987-12-31 to 2026-07-03
CAGR: 8.6%
Sharpe: 0.93
Max Drawdown: -38.3%
Volatility: 10.7%

Coffeehouse — Fixed Allocation Portfolio

Bill Schultheis' Coffeehouse portfolio uses a 40/60 bond/equity split with the equity portion diversified across six 10% slices: large-cap blend (SPY), large-cap value (IVE), small-cap blend (IJR), small-cap value (IJS), international (EFA), and REITs (VNQ). The equal weighting creates automatic factor tilts toward small-cap and value.

Coffeehouse: frequently asked questions

What is Coffeehouse?: Conservative 7-fund portfolio: 40% bonds, 60% equities diversified across large, small, value, international, and REITs.
Who created the Coffeehouse strategy?: Coffeehouse was developed by Bill Schultheis. It is based on Schultheis, B. The Coffeehouse Investor (1998).
What is the historical return and maximum drawdown of Coffeehouse?: Backtested from 1987-12-31 to 2026-07-03, Coffeehouse returned 8.6% CAGR with a -38.3% maximum drawdown and a Sharpe ratio of 0.93. Past performance does not guarantee future results.
How often is Coffeehouse rebalanced?: Coffeehouse is rebalanced annual. BestFolio publishes the updated allocation signal each period.
Is Coffeehouse a fixed or tactical strategy?: Coffeehouse is a fixed-allocation (strategic) portfolio: it holds a set allocation and rebalances on schedule rather than rotating based on market signals.

Backtest Performance (1987-12-31 to 2026-07-03)

Metric	Coffeehouse
Compound Annual Growth Rate (CAGR)	8.6%
Maximum Drawdown	-38.3%
Sharpe Ratio	0.93
Sortino Ratio	1.18
Annualized Volatility	10.7%
Calmar Ratio	0.23
Total Return	2312.6%
Backtest Period	38.5 years

Strategy Details

Type: Fixed / Strategic
Rebalancing: annual
Risk Level: moderate
Variants: 1
Author: Bill Schultheis
Source: Schultheis, B. The Coffeehouse Investor (1998)

Asset Classes

US Large-Cap Equity
US Large-Cap Value
US Small-Cap Equity
US Small-Cap Value
International Developed Equity
REITs
US Bonds

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