any two-fund portfolio investors?

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albireo13
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any two-fund portfolio investors?

Post by albireo13 »

I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
Marseille07
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Re: any two-fund portfolio investors?

Post by Marseille07 »

A two-funder here doing 90/10, US stocks / long-term treasury, no international.
IPS: 100/0 + EF. The US market always recovers. It’s never different this time. Investing is a simple game of rinse and repeat.
17outs
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Re: any two-fund portfolio investors?

Post by 17outs »

Why 2 when you can do 1? Most in here would recommend the 3 fund portfolio of US TSM, Ex-US TSM, TBM, but if you want the set it and forget it just use a target date fund. If you are already i retirement there is also a VG Income fund.
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Brianmcg321
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Re: any two-fund portfolio investors?

Post by Brianmcg321 »

When I retire I plan will just go to a one fund. Vanguard Balanced Index. That would be even simpler. I'm currently in one fund VTSAX except for my 401k plan where I have the 500 and an extended market index.

It's not set in stone so I may just add a bond index and be a two funder. We will see. Seven years to go.
Last edited by Brianmcg321 on Tue Jan 19, 2021 6:22 pm, edited 1 time in total.
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roth evangelist
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Re: any two-fund portfolio investors?

Post by roth evangelist »

That's what my wife's Roth IRA will be as soon as we start it. 75% VTSAX and 25% VTIAX.
Topic Author
albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

I was thinking 60/40 allocation in Vanguard or Fidelity ETFs, with doing annual re-allocations myself.
Total US stocks ... total US bonds.
1andDone
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Re: any two-fund portfolio investors?

Post by 1andDone »

Roughly 65/35 total stock market and total bond. Easy peasy.
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Re: any two-fund portfolio investors?

Post by steve r »

albireo13 wrote: Tue Jan 19, 2021 6:29 pm I was thinking 60/40 allocation in Vanguard or Fidelity ETFs, with doing annual re-allocations myself.
Total US stocks ... total US bonds.
If this is the case, then the balanced index fund is a great option. It invest in that very allocation and has sub 0.10 fees (.07). When you withdraw, it is always from the same place.

The problem with two assets for me is a behavioral one ... I constantly tinker with my asset allocation. Yes, you may save a few hundredths of a percent on fees with two funds, but one mistake in timing or what not will cost you more.

Just my two cents.
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Topic Author
albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

I don't plan on tinkering. I am a "set and forget" investor, maybe assessing once a year.

How frequently does the Vanguard BIF re-allocated?
Does Fidelity offer something like the Vanguard Balanced Index Fund?
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birdog
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Re: any two-fund portfolio investors?

Post by birdog »

I have a two fund portfolio (85% VTI and 15% BIV) and am trending towards 80-20 which I plan to hold throughout retirement which is just around the corner. The simplicity of it makes it appealing to me and removes my desire/temptation to tinker with it. I can also totally understand a one fund balanced portfolio as well.
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JoMoney
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Re: any two-fund portfolio investors?

Post by JoMoney »

I use a low-cost S&P 500 fund and cash.
My "cash" is the most complicated part of my portfolio :annoyed It's currently a mishmash of literal cash, bank accounts, series I savings bonds, and "stable value" trust in a 401k.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: any two-fund portfolio investors?

Post by Wanderingwheelz »

albireo13 wrote: Tue Jan 19, 2021 6:29 pm I was thinking 60/40 allocation in Vanguard or Fidelity ETFs, with doing annual re-allocations myself.
Total US stocks ... total US bonds.
That’s the text book early retiree allocation. But I’d make sure you’ve done the proper amount of planning to make sure that allocation will see you through to the end. The one size fits all approach to retirement can be costly.
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albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

I have been thinking about it and am comfortable for now with 60/40. I will be re-assessing yearly.
For this reason, I am thinking of separate funds so, I can manually change allocation if I so desire down the road.
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Re: any two-fund portfolio investors?

Post by pkcrafter »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.
If the 200k is in taxable, then I would suggest Vanguard's tax-managed balanced (50/50)

For the IRA use Vanguard lifestrategy Moderate fund(60/40)

https://investor.vanguard.com/mutual-fu ... trategy/#/

This combination will provide an overall portfolio that's just a bit lower than 60/40 and it's self-maintained.

You said above that you are conservative, and my interpretation of that is 60% equity is not really conservative for a retiree. What is your withdrawal rate going to be?

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
Nev-Ktm-Inv
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Re: any two-fund portfolio investors?

Post by Nev-Ktm-Inv »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
We retired at 55 and have been retired 9 years now. I found BoggleHeads a few years ago. Up until last June were were in a managed relationship with Merrill. The decision to go to self managed was a long process for us. I read some of the Bogglehead books--and decided we would save the fees and do it ourselves. This was after much research on this site and others. Am so glad we made the Jump-alot less stress since we have control now--We went 2 fund route with our IRAs. At first our AA was going to be 60-40 but ended up with it being 50/50 with VTI and BND. We slowly moved the entire relationship into that AA at Fidelity over a 3 month period from Merrill. We currently dont have any other brokerages accts but will be opening a taxable one soon. Fidelity has these modeling tools that you can use that shows how you possibly could fair during regular, bad or very bad markets with specific AAs(Asset Allocations). I used the bad markets scenario as a model just to be safer and was happy with the result of the 50/50 AA in a long term bad market environment. Our previous relationship had way too many unknown investments in it. And we rode out the march 2020 dip but when our accts came back to pre-march levels by June we decided to take our money and move to some environment we had more control of. So we picked Fidelity but wanted the Vangard Funds. We have not looked back since adopting the BH 2 fund approach. Sleep alot better with this AA now. Rather then the 90/10 AA split at Merrill we had in individual Stock and Bonds. Big savings on Fees all around. And much happier owning the Market as opposed to just individual Stocks and bonds.
Good luck in your quest.
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One Ping
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Re: any two-fund portfolio investors?

Post by One Ping »

pkcrafter wrote: Wed Jan 20, 2021 1:33 pm
albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.
If the 200k is in taxable, then I would suggest Vanguard's tax-managed balanced (50/50)

For the IRA use Vanguard lifestrategy Moderate fund(60/40)

https://investor.vanguard.com/mutual-fu ... trategy/#/

This combination will provide an overall portfolio that's just a bit lower than 60/40 and it's self-maintained.

You said above that you are conservative, and my interpretation of that is 60% equity is not really conservative for a retiree. What is your withdrawal rate going to be?

Paul
This is the crux of the matter.

I know a retiree with a $3+MM portfolio whose pension + SS provide 120% of their expenses. The withdrawal rate is essentially -1.0% and the investment time horizon is that of the heirs, roughly 30 to 40 years. In their case, 60% equity would, IMO, be (extremely?) conservative considering the negative withdrawal rate (i.e., adding to the portfolio) and the time horizon equivalent to that of a 30-year old.

I'm not sure we have albireo13's complete picture here ...

Just my 2-cents.
Last edited by One Ping on Wed Jan 20, 2021 7:42 pm, edited 1 time in total.
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Re: any two-fund portfolio investors?

Post by Ferdinand2014 »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
I am a 2 fund investor. FXAIX (Fidelity 500 Index Fund ER 0.015) and cash enough to feel warm and cozy (treasury bills). I only have one fund so no rebalancing, allocation or comparisons to other funds to lead me down behavioral rabbit holes. Every week without fail, Fidelity automatically invests into FXAIX in all of my accounts without a touch or click of a keyboard. That alone has likely increased my returns and net worth more than any other strategy or allocation. If I was inclined to be more worldly I might do a VTWAX/VT (Vanguard total world stock index fund) and cash.
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Now Boarding
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Re: any two-fund portfolio investors?

Post by Now Boarding »

Also, happily, a lazy investor. Like others here, I'm in the accumulation phase and keep 12 months of cash in t-bills and the rest goes into VOO. No rebalancing, no tinkering.
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Taylor Larimore
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Re: any two-fund portfolio investors?

Post by Taylor Larimore »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
albireo13:

I congratulate you for considering a two-fund portfolio. It is a favorite of John Bogle, Warren Buffet and our own abuss368. I slightly favor The Three-Fund Portfolio which includes a total international fund.

Both the two-fund and three-fund portfolios are very diversified, low cost, tax-efficient and simple to maintain.

You can't go wrong.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "People should invest in total market stock and bond funds for the long term. Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: any two-fund portfolio investors?

Post by abuss368 »

Ferdinand2014 wrote: Wed Jan 20, 2021 4:53 pm
albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
I am a 2 fund investor. FXAIX (Fidelity 500 Index Fund ER 0.015) and cash enough to feel warm and cozy (treasury bills). I only have one fund so no rebalancing, allocation or comparisons to other funds to lead me down behavioral rabbit holes. Every week without fail, Fidelity automatically invests into FXAIX in all of my accounts without a touch or click of a keyboard. That alone has likely increased my returns and net worth more than any other strategy or allocation. If I was inclined to be more worldly I might do a VTWAX/VT (Vanguard total world stock index fund) and cash.
This is such an awesome strategy and approach. It works!

Can it really be this simple?

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by abuss368 »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
Great question! Honestly I have found over the years and during our journey that less is better. I have a preference for fewer funds with higher balances.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by abuss368 »

Taylor Larimore wrote: Wed Jan 20, 2021 5:13 pm
I congratulate you for considering a two-fund portfolio. It is a favorite of John Bogle, Warren Buffet and our own abuss368. I slightly favor The Three-Fund Portfolio which includes a total international fund.

Both the two-fund and three-fund portfolios are very diversified, low cost, tax-efficient and simple to maintain.

You can't go wrong.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "People should invest in total market stock and bond funds for the long term. Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard."
Excellent advice from our very own Taylor Larimore! I especially like “You can’t go wrong”! That is key and one that I feel is sometimes lost in the endless debate. Both of these portfolio’s will NEVER be below average.

Thank you Jack Bogle!

Thank you Taylor!

Best always.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

Taylor Larimore wrote: Wed Jan 20, 2021 5:13 pm
albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
albireo13:

I congratulate you for considering a two-fund portfolio. It is a favorite of John Bogle, Warren Buffet and our own abuss368. I slightly favor The Three-Fund Portfolio which includes a total international fund.

Both the two-fund and three-fund portfolios are very diversified, low cost, tax-efficient and simple to maintain.

You can't go wrong.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "People should invest in total market stock and bond funds for the long term. Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard."
Thanks all, and thanks Taylor.

Sometimes intelligence can be measured not by how much you know but .... by how much you realize you don't know.

And I admit I don't know that much about the market and about trading, and I won't pretend I do. And I don't pretend I
have a lot of intelligence!! My best hope is to protect myself from ... myself. From making mistakes.
With that in mind, a simple portfolio is most attractive.
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albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

More insight into my situation:

me - retired, 65yo, not pulling SS yet
my IRA ~$1M
my pensions = $3000/mo = $36000/yr
SS at FRA = $3138/mo = $37600/yr

wife - still working for another 3 yrs, 60yo
403B = $740K
expected pension = $4500/mo = $54000/yr
SS at FRA = $3000/mo = $36000/yr


So, SS and pensions = ~$163000/yr (if SS exists anymore)
= $139000/yr if I derate SS by 2/3
plus ~ $1.7M in tax deferred

Expenses = $110K/yr


If SS stays real we will be fine without touching assets.
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Re: any two-fund portfolio investors?

Post by abuss368 »

Brianmcg321 wrote: Tue Jan 19, 2021 6:19 pm When I retire I plan will just go to a one fund. Vanguard Balanced Index. That would be even simpler. I'm currently in one fund VTSAX except for my 401k plan where I have the 500 and an extended market index.

It's not set in stone so I may just add a bond index and be a two funder. We will see. Seven years to go.
In my opinion this is a very good strategy. Our 401k plan at one time only offered a low cost S&P 500 fund. I used that one fund and did not bother with any extended market fund. That approach was simple and actually worked very well.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by abuss368 »

albireo13 wrote: Wed Jan 20, 2021 7:40 pm
My best hope is to protect myself from ... myself.
This is HUGE! You said it. Investor behavior can make or break one over the long term!

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by abuss368 »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
You may want to consider checking out the “Jack Bogle - Two Fund Portfolio” thread which has a ton of very good information.

Here is the link - viewtopic.php?f=10&t=188176

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

Thanks. Done that.
It is so tempting and attractive to start dabbling in many funds but ... what is the gain??
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Re: any two-fund portfolio investors?

Post by birdog »

albireo13 wrote: Wed Jan 20, 2021 10:48 pm Thanks. Done that.
It is so tempting and attractive to start dabbling in many funds but ... what is the gain??
“It's not the daily increase but daily decrease. Hack away at the unessential.” “Simplicity is the key to brilliance.”
- Bruce Lee
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Re: any two-fund portfolio investors?

Post by abuss368 »

birdog wrote: Thu Jan 21, 2021 7:58 am
albireo13 wrote: Wed Jan 20, 2021 10:48 pm Thanks. Done that.
It is so tempting and attractive to start dabbling in many funds but ... what is the gain??
“It's not the daily increase but daily decrease. Hack away at the unessential.” “Simplicity is the key to brilliance.”
- Bruce Lee
That is a great quote not only for investing, but life in general.

Thank you for sharing.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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albireo13
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Re: any two-fund portfolio investors?

Post by albireo13 »

I was taught by a wise man to pay your most attention to that which you have the most control of ... the spending side.
Your income side, not so much.
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Re: any two-fund portfolio investors?

Post by birdog »

albireo13 wrote: Thu Jan 21, 2021 11:22 am I was taught by a wise man to pay your most attention to that which you have the most control of ... the spending side.
Your income side, not so much.
I'm not sure I really agree with that statement but since you qualified it with "most" then I guess it holds fairly true. I will say that saving an extra dollar is more valuable than earning an extra dollar due to the income tax involved.
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Re: any two-fund portfolio investors?

Post by FactualFran »

I am a two-fund investor with a 401(k). One fund is similar to the Vanguard Life Strategy Growth fund, the other fund is a stable value fund.
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Re: any two-fund portfolio investors?

Post by abuss368 »

Taylor Larimore wrote: Wed Jan 20, 2021 5:13 pm
albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
albireo13:

I congratulate you for considering a two-fund portfolio. It is a favorite of John Bogle, Warren Buffet and our own abuss368. I slightly favor The Three-Fund Portfolio which includes a total international fund.

Both the two-fund and three-fund portfolios are very diversified, low cost, tax-efficient and simple to maintain.

You can't go wrong.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "People should invest in total market stock and bond funds for the long term. Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard."
Many thanks Taylor! Together the Two Fund Portfolio and Three Fund Portfolio are making a difference in helping Bogleheads earn their fair share of whatever returns the markets are generous enough to provide.

Beat.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by abuss368 »

Brianmcg321 wrote: Tue Jan 19, 2021 6:19 pm When I retire I plan will just go to a one fund. Vanguard Balanced Index. That would be even simpler. I'm currently in one fund VTSAX except for my 401k plan where I have the 500 and an extended market index.

It's not set in stone so I may just add a bond index and be a two funder. We will see. Seven years to go.
This is an excellent strategy. Jack Bogle often said Balanced Index would work for most investors.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: any two-fund portfolio investors?

Post by ch4au2 »

Two funder here, 60/40 VTI/BND. been retired for 9 years. No regrets, it's actually produced almost 4x return compared to my planning. So after 9 years, I'm way ahead of where I had planned to be. But of course, that was the plan :D
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Re: any two-fund portfolio investors?

Post by anon_investor »

JoMoney wrote: Wed Jan 20, 2021 8:57 am I use a low-cost S&P 500 fund and cash.
My "cash" is the most complicated part of my portfolio :annoyed It's currently a mishmash of literal cash, bank accounts, series I savings bonds, and "stable value" trust in a 401k.
This is very similar to what I have. Except I mainly have Total Stock Market or an approximation (80% S&P500 / 20% Extended Market in my 401k), although I have a tiny bit of company stock and a few random index fund in taxable with low cost basis.
behumble
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Re: any two-fund portfolio investors?

Post by behumble »

abuss368 wrote: Wed Jan 20, 2021 6:20 pm
Ferdinand2014 wrote: Wed Jan 20, 2021 4:53 pm
albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
I am a 2 fund investor. FXAIX (Fidelity 500 Index Fund ER 0.015) and cash enough to feel warm and cozy (treasury bills). I only have one fund so no rebalancing, allocation or comparisons to other funds to lead me down behavioral rabbit holes. Every week without fail, Fidelity automatically invests into FXAIX in all of my accounts without a touch or click of a keyboard. That alone has likely increased my returns and net worth more than any other strategy or allocation. If I was inclined to be more worldly I might do a VTWAX/VT (Vanguard total world stock index fund) and cash.
This is such an awesome strategy and approach. It works!

Can it really be this simple?

Tony
Any issues with using one fund, like VBIAX (Balanced Index fund) or VSMGX (LifeStrategy Moderate Growth) across all accounts to avoid getting in the way of yourself?
r.walker
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Re: any two-fund portfolio investors?

Post by r.walker »

Two-fund index investor here. 80% Vanguard Total U.S., 20% Vanguard Total International. Never owned bonds over last 35 years.

Total asset allocation is 96% Stocks, 4% Cash (MM accounts). A bit extreme for many, but works for me.
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Taylor Larimore
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Disadvantage of permanently balanced funds

Post by Taylor Larimore »

behumble wrote: Sat Jan 30, 2021 12:12 pm
Any issues with using one fund, like VBIAX (Balanced Index fund) or VSMGX (LifeStrategy Moderate Growth) across all accounts to avoid getting in the way of yourself?
behumble:

There are three primary "issues" with balanced (stocks & bonds) funds:

* Most balanced funds are tax-inefficient and do not belong in taxable accounts.

* Either the stocks or bonds will be in the wrong type account.

* VBIAX (Vanguard Balanced Index Adm) has a permanent allocation of about 60% stocks/40% bonds. Most of us change our desired allocation as we get older.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “When comparing returns of mutual funds, insist on getting after-tax returns. You’ll never buy another actively managed fund again.”
"Simplicity is the master key to financial success." -- Jack Bogle
behumble
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Re: Disadvantage of permanently balanced funds

Post by behumble »

Taylor Larimore wrote: Sat Jan 30, 2021 1:00 pm
behumble wrote: Sat Jan 30, 2021 12:12 pm
Any issues with using one fund, like VBIAX (Balanced Index fund) or VSMGX (LifeStrategy Moderate Growth) across all accounts to avoid getting in the way of yourself?
behumble:

There are three primary "issues" with balanced (stocks & bonds) funds:

* Most balanced funds are tax-inefficient and do not belong in taxable accounts.

* Either the stocks or bonds will be in the wrong type account.

* VBIAX (Vanguard Balanced Index Adm) has a permanent allocation of about 60% stocks/40% bonds. Most of us change our desired allocation as we get older.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “When comparing returns of mutual funds, insist on getting after-tax returns. You’ll never buy another actively managed fund again.”

Mr. Larimore, thank you for your thoughts. I would love to get your thoughts on the following interesting post I read from a LongInvest about my question involving a one fund portfolio. He does a deep dive and makes an interesting argument. Here's a link to his post. viewtopic.php?t=287967
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Taylor Larimore
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Re: any two-fund portfolio investors?

Post by Taylor Larimore »

behumble:
I would love to get your thoughts on the following interesting post
I am going to pass on this one. I simply don't have the time to give a complete reply.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Never underrate either the majesty of simplicity or its proven effectiveness as a long-term strategy for productive investing."
"Simplicity is the master key to financial success." -- Jack Bogle
behumble
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Re: any two-fund portfolio investors?

Post by behumble »

Taylor Larimore wrote: Sat Jan 30, 2021 1:56 pm behumble:
I would love to get your thoughts on the following interesting post
I am going to pass on this one. I simply don't have the time to give a complete reply.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Never underrate either the majesty of simplicity or its proven effectiveness as a long-term strategy for productive investing."
Understood, thank you.
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abuss368
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Re: any two-fund portfolio investors?

Post by abuss368 »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
Have you read the excellent “Jack Bogle - Two Fund Portfolio” thread? In my opinion both the Two Fund Portfolio and Three Fund Portfolio are excellent strategies.

The Jack Bogle Two Fund Portfolio thread can be accessed here: viewtopic.php?f=10&t=188176

Tony
John C. Bogle: “Simplicity is the master key to financial success."
Robert20
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Re: any two-fund portfolio investors?

Post by Robert20 »

albireo13 wrote: Tue Jan 19, 2021 6:14 pm I am definitely a lazy investor. I do not trust myself to try and optimize returns.
I just retired so, am conservative. I like the index fund approach and have been reading Bogle forums and articles on 2, 3, and 4 or more fund portfolios. I currently have $200K I am going to invest shortly. I also have ~$1M in IRA funds which I may also move to the same portfolio.

The simplicity of the two-fund portfolio is attractive.
I am curious how many people simplify this much? Any stories of changing direction?

What is the most popular portfolio here in Bogle land?

Thx
Check this.. zero expense ratio on this ETF (same as VTI or VOO equivalent)

SFY Tidal ETF Trust - SoFi Select 500 ETF
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