Index Sloth
A collectible critter in the spirit of John Bogle · 1974–2019
A critter in the spirit of John Bogle, who founded Vanguard and launched the first index mutual fund available to everyday investors in 1976. Inspired by his lifelong crusade that low costs and broad diversification serve ordinary savers best. Educational inspiration only.
What a player learnsFees and turnover quietly erode returns; keep both low.
Balance a portfolio by risk contribution, not dollars, so no asset dominates.
Risk parity allocates by how much risk each asset contributes rather than how many dollars you put in it. A traditional 60/40 portfolio is dominated by equity risk because stocks are far more volatile than bonds. Risk parity instead equalizes risk across stocks, bonds, and commodities, then applies modest leverage to the lower-risk sleeves (typically bonds) so the whole portfolio still targets a reasonable return. The goal is a smoother ride that performs across many economic environments: growth, recession, inflation, deflation. Volatility targeting continuously rebalances exposures. The strategy leans heavily on bonds and leverage, and on the assumption that diversification relationships hold.
Strengths
- More balanced risk than dollar-weighted 60/40
- Aims to perform across multiple economic regimes
- Systematic rebalancing removes emotion
Trade-offs
- Uses leverage, and levered bonds hurt when rates rise (e.g. 2022)
- Relies on stock-bond diversification that can break down
- Underperforms in sustained equity bull markets
| Ticker | Company | Weight | Window | Path |
|---|---|---|---|---|
🏢 BRK.B | Berkshire Hathaway Berkshire Hathaway helps money move, grow, and stay safe. | 20% | ▲ +10.3% | |
🩹 JNJ | Johnson & Johnson Medicines and medical devices — a healthcare giant. | 20% | ▲ +2.2% | |
🥤 KO | Coca-Cola Coca-Cola and hundreds of other drinks sold everywhere. | 20% | ▼ −3.4% | |
🏢 SO | Southern Company Southern Company provides the steady power and water we rely on. | 20% | ▲ +1.9% | |
🧼 PG | Procter & Gamble Everyday brands: Tide, Pampers, Gillette, Crest. | 20% | ▲ +1.5% |
🦥 Index Sloth ran a index style book this window. It returned +2.4% (+0.7% vs SPY), with a Sharpe of 3.15 and a -2.2% worst dip. True to its discipline, it simply held the whole market, low and steady. Discipline over drama — this describes the critter's process and result, not the merit of any company. Simulated · educational · not investment advice.
Recruit the Index Sloth style in Conviction League
Draft a critter that trades in this spirit, train it on a simulated market, and climb the leaderboard — free and fully simulated, so there's zero real-money risk.
Prices are simulated by a factor model; tickers are real large-caps used for familiarity only. Returns shown are raw window totals over a ~1-month fixture; Sharpe/Sortino/vol are annualized ratios.