Who uses the 3 fund portfolio ?

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ponyboy
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Re: Who uses the 3 fund portfolio ?

Post by ponyboy » Thu Aug 16, 2018 4:19 pm

I have a 3 fund portfolio minus the international. So really I have a 2 fund portfolio.

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ruralavalon
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Re: Who uses the 3 fund portfolio ?

Post by ruralavalon » Thu Aug 16, 2018 5:19 pm

RIMDBogle wrote:
Thu Aug 16, 2018 3:55 pm
Thanks for your reply. I did find in another thread,

pkcrafter wrote: ↑

Small value and REIT are pretty common additions to the 3-fund. The long term bonds are OK in an endowment, but they won't reduce volatility in an individual investor's portfolio. Replace long term bond with total bond and you've got a moderate slice/dice Boglehead portfolio.
where can I research the appropriate REIT/Small value allocation for portfolio?

What are the impact to 3 Fund portfolios by adding REIT/Small value ?

Thanks for sharing.
If you want a small-cap value tilt, then Rick Ferri has suggested using a small-cap value index fund at around 25% of domestic stocks. “My preference is 75 percent to a total market index fund and 25 percent allocation to a small-value index fund“, Rick Ferri, etf.com, "To Tilt Or Not To Tilt?". I use 25% in Vanguard Small-cap Value Index Fund Admiral Shares (VSIAX).

"Most Bogleheads allocate REITs up to 10% of their total portfolio according to a forum poll. David Swensen, CIO of Yale University and author of Unconventional Success suggests a 20% allocation to equity REITs in his model portfolio for individual investors. " Wiki article, Real Estate Investment Trust, "Role in portfolio".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Helo80
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Re: Who uses the 3 fund portfolio ?

Post by Helo80 » Thu Aug 16, 2018 8:06 pm

In my 401k and Roth IRA, I hold a 3 fund portfolio --- well, mainly two fund as I go domestic and international equities at a 80/20 mix. For my taxable accounts, that's my "fun" money with a mixture of individual stocks and vanguard small/mid can index/value/growth funds -- still though half of my taxable is your standard S&P 500 and TSM index funds (no international). I can't be a purist in my taxable account as YOLO. It's just fun to see what does better than the typical BH TSM/S&P500 index fund. For my age, I'm well ahead of the curve in NW, and most people retiring now, I am ahead of already even though I'm several decades away from retirement. But, in my core retirement funds, I'm a purist.

RIMDBogle
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Re: Who uses the 3 fund portfolio ?

Post by RIMDBogle » Thu Aug 16, 2018 8:36 pm

Thanks for your pointers.

Rick Ferri piece is silent about small cap weight in a portfolio. What is the acceptable range?

I find in REIT link
REITs, due to the risks involved, should be treated as equity even though they have income-producing characteristics similar to bonds.
As we find in raising rate/inflation environment, bond shows negative return, how do I pick right bond asset preserve fixed income $ of portfolio?

Is it a good idea to use combination short term bond, multi sector bond, closed Fund, MLP etc in fixed income bucket?

We hear lot about diversification. In a 3 Fund portfolio, when is appropriate to add more asset of same class.

eg: 70/30 Port. If total port is 1M, fixed income is 300K, Equity 700K.

Do we still place single bond asst BND for 300K and place single total us equity (VTI) for 700K? :?:

Thanks for sharing.

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ruralavalon
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Re: Who uses the 3 fund portfolio ?

Post by ruralavalon » Fri Aug 17, 2018 8:34 am

RIMDBogle wrote:
Thu Aug 16, 2018 8:36 pm
Thanks for your pointers.

Rick Ferri piece is silent about small cap weight in a portfolio. What is the acceptable range?
That depends on:
1) the bond allocation; and
2) the international stock allocation.

RIMDBogle wrote:
Thu Aug 16, 2018 8:36 pm
I find in REIT link
REITs, due to the risks involved, should be treated as equity even though they have income-producing characteristics similar to bonds.
As we find in raising rate/inflation environment, bond shows negative return, how do I pick right bond asset preserve fixed income $ of portfolio?
Is it a good idea to use combination short term bond, multi sector bond, closed Fund, MLP etc in fixed income bucket?

We hear lot about diversification. In a 3 Fund portfolio, when is appropriate to add more asset of same class.

eg: 70/30 Port. If total port is 1M, fixed income is 300K, Equity 700K.

Do we still place single bond asst BND for 300K and place single total us equity (VTI) for 700K? :?:

Thanks for sharing.
For specific allocation ideas you need to start a separate thread with your specific information, in this format: "Asking Portfolio Questions".
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Carlos Danger
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Re: Who uses the 3 fund portfolio ?

Post by Carlos Danger » Fri Aug 17, 2018 8:56 am

I don't, but within our portfolio a 2 fund approach is the core (State Street S&P Index Fund in 403(b), Vanguard Total International Stock Market in our Vanguard accounts). Those 2 account for about half of our portfolio. Once we hit age 50, we'll move toward a 3 fund approach and start moving heavily into bonds, probably age minus 20 adjusted on an annual basis.

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abuss368
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Re: Who uses the 3 fund portfolio ?

Post by abuss368 » Fri Aug 17, 2018 9:02 am

ponyboy wrote:
Thu Aug 16, 2018 4:19 pm
I have a 3 fund portfolio minus the international. So really I have a 2 fund portfolio.
Jack Bogle’s Two Fund Portfolio! Simple and effective!!!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

birdog
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Re: Who uses the 3 fund portfolio ?

Post by birdog » Fri Aug 17, 2018 9:33 am

Carlos Danger wrote:
Fri Aug 17, 2018 8:56 am
I don't, but within our portfolio a 2 fund approach is the core (State Street S&P Index Fund in 403(b), Vanguard Total International Stock Market in our Vanguard accounts). Those 2 account for about half of our portfolio. Once we hit age 50, we'll move toward a 3 fund approach and start moving heavily into bonds, probably age minus 20 adjusted on an annual basis.
I like this approach in regards to waiting on buying bonds. I currently use the standard 3 fund approach but if I had it to do over again I'd hold off on buying the bond fund until I was at/near retirement and I'd probably forego Int'l altogether. I'd buy only the Vanguard total stock market fund and then start adding Vanguard total bond when close to retirement.

vk_217
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Re: Who uses the 3 fund portfolio ?

Post by vk_217 » Fri Aug 17, 2018 9:52 am

I currently have a 4 fund portfolio Total US Stock, Total Intl Stock, Total Bond market and Megacorp. Megacorp is 60% of my current portfolio and I am working on slowly transitioning these over to the 3 fund portfolio
Pardon my ignorance, What is megacorp? I have heard this in 401K related threads but can't seem to find detailed information on this.
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Earl Lemongrab
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Re: Who uses the 3 fund portfolio ?

Post by Earl Lemongrab » Fri Aug 17, 2018 10:44 am

vk_217 wrote:
Fri Aug 17, 2018 9:52 am
I currently have a 4 fund portfolio Total US Stock, Total Intl Stock, Total Bond market and Megacorp. Megacorp is 60% of my current portfolio and I am working on slowly transitioning these over to the 3 fund portfolio
Pardon my ignorance, What is megacorp? I have heard this in 401K related threads but can't seem to find detailed information on this.
A large company for which the person works.
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WanderingDoc
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Re: Who uses the 3 fund portfolio ?

Post by WanderingDoc » Fri Aug 17, 2018 2:54 pm

lostdog wrote:
Fri Apr 06, 2018 8:13 am
Two fund portfolio here.

Vanguard Total World Index--removes speculation and home country bias. The most bogleheadish fund in existence.

Vangaurd Total Bond Index
Would you save on ERs if you split it up Total U.S. and Total World?
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lostdog
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Re: Who uses the 3 fund portfolio ?

Post by lostdog » Fri Aug 17, 2018 3:00 pm

WanderingDoc wrote:
Fri Aug 17, 2018 2:54 pm
lostdog wrote:
Fri Apr 06, 2018 8:13 am
Two fund portfolio here.

Vanguard Total World Index--removes speculation and home country bias. The most bogleheadish fund in existence.

Vangaurd Total Bond Index
Would you save on ERs if you split it up Total U.S. and Total World?
Yes. For me the savings is negligible and I value simplicity.
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rossaxr
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Re: Who uses the 3 fund portfolio ?

Post by rossaxr » Fri Aug 17, 2018 4:28 pm

I used a four-fund portfolio because my 401k accounts don't have total US stock market..they have large and extended, so i have to hold both to emulate a total US stock market

VINIX
VEXAX
VTIAX
VBTLX

Reference:
https://www.bogleheads.org/wiki/Approxi ... ock_market

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