Optimal Number of Mutual Funds

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abuss368
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Optimal Number of Mutual Funds

Post by abuss368 » Wed Feb 12, 2014 9:36 pm

I have a general question for Bogleheads: What do you generally think is the optimal number of mutual funds? At what point in a portfolio does it become a case of diminishing returns?

I understand that there are probably two camps: The total markets folks and the slice and dice.

There is the all in one approach such as a Target of Life Strategy fund and the Three Fund Portfolio crowd. Then there is the 6 - 10 fund approach.

I have read that after 3 - 5 funds anything more probably does not move the needle in either direction.

I am very interest in thoughts and different strategies.
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Re: Optimal Number of Mutual Funds

Post by livesoft » Wed Feb 12, 2014 9:38 pm

If one has a taxable account, one may end up with two funds for each asset class because of tax loss harvesting.

So I'm gonna say that 38 funds is the Optimal Number of Mutual Funds, but folks should try to have fewer.
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Re: Optimal Number of Mutual Funds

Post by Boglenaut » Wed Feb 12, 2014 9:50 pm

It varies...

His and her Rollover IRA, Roths, 401K, taxable...

It adds up. Now if you have 2 identical positions in two accounts, does it add complexity if you made one a "non-core" (REIT, Small Cap, etc.) fund?

Our number fluctuates. A 401K fund may have $100K in one position, but $872 in another that was just a remnant from the last rebalancing. We have a spreadsheet that adds them up, so it really is no more complex with more funds.

Our number grows and shrinks... I consolidate every now and then to keep it manageable, but don't freak out if a few lines are added to a spreadsheet.

Right now our number is actually high because I am doing a long term consolidation. I have added new funds temporarily to keep everything balanced while moving accounts to VG...
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Re: Optimal Number of Mutual Funds

Post by baw703916 » Wed Feb 12, 2014 9:51 pm

abuss368,

If you are happy with your portfolio, then whatever the number you have (4 according to your signature) is the right number for you. So I'm not sure what you are getting at with this question.

I have a lot more than four, but a lot less than 38. It works for me. Reducing the number of funds as much as possible simply isn't that important to me. If others put more value in simplicity than I do, then they should probably hold fewer funds.

Brad
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Re: Optimal Number of Mutual Funds

Post by Taylor Larimore » Wed Feb 12, 2014 9:55 pm

Abuss:

Mr. Bogle writes in the Little Book of Common Sense Investing:
Profit from the majesty of simplicity--hold Index Funds that own the entire stock market.
The Three Fund Portfolio reflects this advice.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Optimal Number of Mutual Funds

Post by abuss368 » Wed Feb 12, 2014 9:58 pm

baw703916 wrote:abuss368,

If you are happy with your portfolio, then whatever the number you have (4 according to your signature) is the right number for you. So I'm not sure what you are getting at with this question.

I have a lot more than four, but a lot less than 38. It works for me. Reducing the number of funds as much as possible simply isn't that important to me. If others put more value in simplicity than I do, then they should probably hold fewer funds.

Brad
I agree. I was curious from other Bogleheads perspective.

We have five funds in each account:

* Total Stock Index
* Total International Index
* US REIT
* International REIT
* Total Bond Index/Intermediate Term Tax Exempt
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Wed Feb 12, 2014 9:59 pm

Taylor Larimore wrote:Abuss:

Mr. Bogle writes in the Little Book of Common Sense Investing:
Profit from the majesty of simplicity--hold Index Funds that own the entire stock market.
The Three Fund Portfolio reflects this advice.

Best wishes.
Taylor
Hi Taylor,

As always, excellent advice from Jack Bogle!

The Three Fund Portfolio accomplishes this.
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Wed Feb 12, 2014 10:00 pm

livesoft wrote: So I'm gonna say that 38 funds is the Optimal Number of Mutual Funds, but folks should try to have fewer.
Priceless. We have 5 funds. Now I need to tell my wife that I have to buy 33 more funds to reach our retirement goals!
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Re: Optimal Number of Mutual Funds

Post by Random Musings » Wed Feb 12, 2014 10:02 pm

It always has been, and it always will be, 42.

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Re: Optimal Number of Mutual Funds

Post by DSInvestor » Wed Feb 12, 2014 10:03 pm

abuss368 wrote:
livesoft wrote: So I'm gonna say that 38 funds is the Optimal Number of Mutual Funds, but folks should try to have fewer.
Priceless. We have 5 funds. Now I need to tell my wife that I have to buy 33 more funds to reach our retirement goals!
If you really hold 5 funds in each account, you may have 38 fund accounts. My optimal would not involve duplicating AA in every account.
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Re: Optimal Number of Mutual Funds

Post by AndrewXnn » Wed Feb 12, 2014 10:06 pm

5 funds is about right, but when the price is right, one should also consider buying Berkshire Hathaway.
It is effectively a mutual fund.

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Re: Optimal Number of Mutual Funds

Post by DSInvestor » Wed Feb 12, 2014 10:07 pm

abuss368 wrote:Priceless. We have 5 funds. Now I need to tell my wife that I have to buy 33 more funds to reach our retirement goals!
abuss368 wrote: We have five funds in each account:

* Total Stock Index
* Total International Index
* US REIT
* International REIT
* Total Bond Index/Intermediate Term Tax Exempt
If you really hold 5 funds in each account, you may have 38 fund accounts in vanguard terminology. Good thing you're not a slice and dicer. My optimal would not involve duplicating AA in every account. Understand your desire to hold bonds in taxable to reduce volatility of the taxable account. We each go with what works for us. I hold TSM, FTSE, TBM, TIPS.
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Re: Optimal Number of Mutual Funds

Post by Boglenaut » Wed Feb 12, 2014 10:13 pm

I have one 401a account I cannot roll over... another inherited IRA that I am waiting for a low tax year to cash out. We have two Roth IRA's at two institutions each... those are slated to be combined into 2 total at VG, but there is a price to pay for simplicity (closing fees, being out of the market during the transfer, paperwork) but nothing really gained other that two fewer lines on the spreadsheet.

One advantage I do get from duplicated accounts at least is that I like to rebalance often. It makes it a lot easier to avoid frequent trader restrictions with duplicated accounts.

All the same, as I mentioned, I am currently on another push to consolidate where I can.

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Re: Optimal Number of Mutual Funds

Post by DonCamillo » Wed Feb 12, 2014 10:13 pm

Having seen declining abilities to manage investments in older relatives, the three fund portfolio looks like a wonderful target for the 70 plus crowd. Even better if you can get automatic rebalancing. It will also be easier at tax time.
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Wed Feb 12, 2014 10:18 pm

AndrewXnn wrote:5 funds is about right, but when the price is right, one should also consider buying Berkshire Hathaway.
It is effectively a mutual fund.
Do you buy Berkshire Hathaway? I would like to see it pay a dividend first. It probably will one day soon with the cash it is generating.
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Re: Optimal Number of Mutual Funds

Post by baw703916 » Wed Feb 12, 2014 10:19 pm

Random Musings wrote:It always has been, and it always will be, 42.

RM
I had no idea that "what is the right number of mutual funds" was the Ultimate Question. :)
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Re: Optimal Number of Mutual Funds

Post by Boglenaut » Wed Feb 12, 2014 10:21 pm

baw703916 wrote:
Random Musings wrote:It always has been, and it always will be, 42.

RM
I had no idea that "what is the right number of mutual funds" was the Ultimate Question. :)
Are we mice!?

I assumed it was "100-Age in Funds".

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Re: Optimal Number of Mutual Funds

Post by island » Wed Feb 12, 2014 10:21 pm

42? 38? Wow that many? I thought most Bogleheads were are big on less is more, simplify. Are they all different funds or do you have same funds in more than one account?

Would any of you mind sharing your rationale for why so many for this newbie?
Thanks.

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Re: Optimal Number of Mutual Funds

Post by Van » Wed Feb 12, 2014 10:22 pm

AndrewXnn wrote:5 funds is about right, but when the price is right, one should also consider buying Berkshire Hathaway.
It is effectively a mutual fund.
Good idea. All I need to know is how to tell when the price is right.

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Re: Optimal Number of Mutual Funds

Post by Boglenaut » Wed Feb 12, 2014 10:25 pm

island wrote: Would any of you mind sharing your rationale for why so many for this newbie?
Thanks.
The "42" was a Hitchhiker's Guide to the Galaxy joke. ;) He wasn't serious (I hope!).

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Re: Optimal Number of Mutual Funds

Post by BolderBoy » Wed Feb 12, 2014 10:27 pm

In the late 1990s I had a dozen funds of random selection in my taxable account. Called a VG rep one day to ask a question, he brought up my account and commented, "Ahhhh, you are a fund collector." I had no idea what he meant by that - and didn't ask - wish I would have, he may have said to own the whole market with 3-4 index funds and set me right 10 years earlier.

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Re: Optimal Number of Mutual Funds

Post by livesoft » Wed Feb 12, 2014 10:35 pm

island wrote:Would any of you mind sharing your rationale for why so many for this newbie?
Thanks.
I stopped counting at 38, so that's why I used that number.
.
.
.
Just kidding.

We have many many accounts because of a long and active investing career. We got the 401(k)s, the 403(b)s, the Roths, the traditional IRAs, the inherited IRAs, the HSAs, the 529s, the UGMAs, the joint brokerages, etc. We use multiple financial institutions since we have no choice with 401(k)s and 403(b)s.

I even added a new fund on the dip last week: Vanguard Total Stock Market Index fund (VTI) which I have not owned since March 2009. Can I join everybody on the Group W Bench now?
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Re: Optimal Number of Mutual Funds

Post by BanditKing » Wed Feb 12, 2014 10:39 pm

I keep mine fairly simple:
  • 3 in my 401k (S&P index, a Large-cap, and a bond fund)
    4 in my Roth (Domestic REIT, Small-cap to offset my S&P indexes, TSM, and HY Corp Bonds fund)
    4 in my taxable (TSM, Total International, Intermediate Tax-Exempt Municipal Bonds, and a MM Sweep)
    1 in an old 403b (S&P Index)
    Two separate 529s in the age-appropriate aggressive funds
I could reduce my 401k down to two, but I like the Large-cap there just to watch it against the index (small joys I guess). I could also probably roll my old 403b somewhere to but I'm lazy about it.

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Re: Optimal Number of Mutual Funds

Post by Boglenaut » Wed Feb 12, 2014 10:46 pm

I only show the 529's on my summary sheet as one line each (Kid A Composite, Kid B Composite). Each is really 5 holdings each that I show on a separate worksheet. I guess we have 10 right there! But if I did a "Pre-Mixed" option fees would be higher, and there is no TBM, TSM, or TISM, fund available. I only rebalance those once a year so it's no hassle.

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Re: Optimal Number of Mutual Funds

Post by JoMoney » Thu Feb 13, 2014 4:18 am

Optimal for who? Different people are going to have different situations.
Tolstoy's Anna Karenina said, “if it is true that there are as many minds as there are heads, then there are as many kinds of love as there are hearts.”
Maybe it's also true that there are as many "optimal" portfolios as there are Bogleheads... each with there own need and ability to take on risk..., different tax situations, different availability in workplace retirement accounts, different tastes and preferences for tilts and what factors they believe are important.
abuss368 wrote:...I am very interest in thoughts and different strategies...
1 Fund
Warren Buffett wrote: ... Just pick a broad index like the S&P 500. Don’t put your money in all at once; do it over a period of time. I recommend John Bogle’s books — any investor in funds should read them. They have all you need to know.
... Vanguard. Reliable, low cost. If you’re not professional, you are thus an amateur. Forget it and go back to work.
... The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time. But good businesses are going to become worth more over time.
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Re: Optimal Number of Mutual Funds

Post by YDNAL » Thu Feb 13, 2014 6:24 am

abuss368 wrote:I have read that after 3 - 5 funds anything more probably does not move the needle in either direction.
1. Where did you read this (source)?
2. Move the needle, how?

There should be no concensus, abuss368, despite that you continually insist in seeking Bogleheadism in investing. Each one of us should seek diversification and 40x plans, for instance, may require holding more funds to accomplish. A taxable investor, for instance, may require multiple funds to harvest losses. We are all different, so we each own our optimal number of investments.
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Re: Optimal Number of Mutual Funds

Post by lazyday » Thu Feb 13, 2014 6:50 am

There's a little on this topic at http://www.bogleheads.org/wiki/Three-fund_portfolio such as some advantages of going past one fund.

Seems not to offer a lot on reasons to expand beyond three-four funds. There is a link to Slice and Dice, which at a glance seems to focus on high returns and diversifying with low correlation asset classes.

Other reasons:
- As a result of tax loss harvesting, as in this thread
- Risk factor diversification while controling costs

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Re: Optimal Number of Mutual Funds

Post by carolinaman » Thu Feb 13, 2014 6:56 am

I have 7 equity and 6 fixed income funds in combination of taxable and non taxable plus TIPS and CDs. I keep saying I am going to consolidate but have not done so yet. Optimal to me is probably less than 10 funds.

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Re: Optimal Number of Mutual Funds

Post by sscritic » Thu Feb 13, 2014 7:28 am

13 to match the day of the month.

If you have Vanguard for taxable and another provider for tax-deferred, it will be hard to stick to three funds. Do you have two funds in tax-deferred and only one in taxable, or do you go the other way around? Do you use a coin to decide?

Bonus question: Is the TIAA Traditional account a mutual fund?
Double bonus question: Did livesoft count it in his 38?d

[And I left out how to count an RA and an SRA; is that one or two? I say two.]

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Re: Optimal Number of Mutual Funds

Post by dbr » Thu Feb 13, 2014 8:43 am

38? 42? No, no, no, my friends. 37 or 41 - prime numbers always.

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Re: Optimal Number of Mutual Funds

Post by livesoft » Thu Feb 13, 2014 8:47 am

^ I knew I should not have bought that Total Stock Market Index fund last week which gave me an even number of funds. :(
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Re: Optimal Number of Mutual Funds

Post by sometimesinvestor » Thu Feb 13, 2014 9:07 am

Older folks defined as people who started investing before 1980 are likely to have many funds. Reasons included that tax shelted accounts were not available , there were not many index funds and lots of skepticisim about "settling for average". The 80s and 90s were very good for stock funds and by the time one understood the value of index funds the gains in ones taxable accounts owned for a long time were such that taxable considerations meant selling was not necessarily a good decision. Yes, if I had to do it again I would have sold out in 2000 or 2007 but I was not very good at market timing and while it was actually reasonable to sell in early 2000 and I am sure a good many did, 2007 was a difficult time to sell as stocks did not look particularly overpriced and bonds did not look all that attractive.

Rebalancing is a very good idea in 401ks and IRASs but is not that great a strategy in taxable accounts .

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Re: Optimal Number of Mutual Funds

Post by kenyan » Thu Feb 13, 2014 11:17 am

My IPS doesn't care about the number of mutual funds; it cares about the asset classes. For me, as a slice-and-dicer, I hold 9 asset classes. I hold however many mutual funds/ETFs I need in order to accomplish that at a relative minimum of cost, while retaining the ability to rebalance.

Right now, that number stands at 13, but it can definitely change with the ebbs and flows of different accounts. I have no taxable retirement account, and don't include 529s in our retirement asset allocation.
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Thu Feb 13, 2014 1:19 pm

johnep wrote:I have 7 equity and 6 fixed income funds in combination of taxable and non taxable plus TIPS and CDs. I keep saying I am going to consolidate but have not done so yet. Optimal to me is probably less than 10 funds.
Jack Brennan in his excellent book "Plain Talk on Investing" noted if an investor has 10 mutual funds, they should consider doing some pruning.
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Re: Optimal Number of Mutual Funds

Post by dbr » Thu Feb 13, 2014 1:26 pm

A more serious answer to the question is that I think many people end up with more or fewer funds to a large extent according to the number of different places they end up with accounts in which certain choices are or are not available.

What the OP is really asking about is the theory of slice and dice investing and tilting and he is really asking about how many asset classes or subclasses should be held independently. He is even mooting the suggestion that the assumed benfits of muti-class investing meet a point of diminishing returns at 4-5 asset classes. I am not sure if this conversation is about asset classes within equities or includes bonds or extends to "alternate" investments.

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Re: Optimal Number of Mutual Funds

Post by abuss368 » Thu Feb 13, 2014 1:30 pm

dbr wrote:A more serious answer to the question is that I think many people end up with more or fewer funds to a large extent according to the number of different places they end up with accounts in which certain choices are or are not available.

What the OP is really asking about is the theory of slice and dice investing and tilting and he is really asking about how many asset classes or subclasses should be held independently. He is even mooting the suggestion that the assumed benfits of muti-class investing meet a point of diminishing returns at 4-5 asset classes. I am not sure if this conversation is about asset classes within equities or includes bonds or extends to "alternate" investments.
Pretty much just an open thread to gauge other Boglehead strategies. One reads Jack Bogle's books where he recommends a fund or two, possibly three. David Swensen had recommended 6 funds and noted that any allocation with less than 5% - 10% is meaningless, and Warren Buffett was on CNBC noting investors should invest in a few or a handful index funds.
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Re: Optimal Number of Mutual Funds

Post by Peter Foley » Thu Feb 13, 2014 1:38 pm

Optimal to me implies sufficient for adequate diversification. If I had all funds available to me in all accounts, I would still end up with a handfull.

Total Stock market
Total International
Stable Value
Total Bond
TIPs
I-Bonds (while not a fund, it is a separate type of holding)

IMHO 3 is not enough as it does not offer inflation protection for non equities nor does it offer reasonable interest rates when rates a very low. Because optimal to me also implies holdings in taxable, tax deferred, and tax free, I end up with having to hold inflation protection in a couple different instruments.

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Re: Optimal Number of Mutual Funds

Post by abuss368 » Thu Feb 13, 2014 1:41 pm

Peter Foley wrote:Optimal to me implies sufficient for adequate diversification. If I had all funds available to me in all accounts, I would still end up with a handfull.

Total Stock market
Total International
Stable Value
Total Bond
TIPs
I-Bonds (while not a fund, it is a separate type of holding)

IMHO 3 is not enough as it does not offer inflation protection for non equities nor does it offer reasonable interest rates when rates a very low. Because optimal to me also implies holdings in taxable, tax deferred, and tax free, I end up with having to hold inflation protection in a couple different instruments.
Would it be reasonable to say you have Three Fund Portfolio with the addition of TIPS and Cash?

I typically do not count cash reserves in our portfolio. We keep cash in a savings account at the bank and have built it up slowly over the years and plan to stay the course.
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Re: Optimal Number of Mutual Funds

Post by Bracket » Thu Feb 13, 2014 2:12 pm

abuss368 wrote:I have a general question for Bogleheads: What do you generally think is the optimal number of mutual funds? At what point in a portfolio does it become a case of diminishing returns?

I understand that there are probably two camps: The total markets folks and the slice and dice.

There is the all in one approach such as a Target of Life Strategy fund and the Three Fund Portfolio crowd. Then there is the 6 - 10 fund approach.

I have read that after 3 - 5 funds anything more probably does not move the needle in either direction.

I am very interest in thoughts and different strategies.
I feel like we've had this conversation before:

http://www.bogleheads.org/forum/viewtop ... 0&t=126223

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Re: Optimal Number of Mutual Funds

Post by abuss368 » Thu Feb 13, 2014 2:53 pm

Bracket wrote:
abuss368 wrote:I have a general question for Bogleheads: What do you generally think is the optimal number of mutual funds? At what point in a portfolio does it become a case of diminishing returns?

I understand that there are probably two camps: The total markets folks and the slice and dice.

There is the all in one approach such as a Target of Life Strategy fund and the Three Fund Portfolio crowd. Then there is the 6 - 10 fund approach.

I have read that after 3 - 5 funds anything more probably does not move the needle in either direction.

I am very interest in thoughts and different strategies.
I feel like we've had this conversation before:

http://www.bogleheads.org/forum/viewtop ... 0&t=126223
Great! Let's have it again! This thread has had some rather good responses thus far and I am glad you have enjoyed it enough to respond as well.
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Re: Optimal Number of Mutual Funds

Post by Random Musings » Thu Feb 13, 2014 4:21 pm

Boglenaut wrote:
island wrote: Would any of you mind sharing your rationale for why so many for this newbie?
Thanks.
The "42" was a Hitchhiker's Guide to the Galaxy joke. ;) He wasn't serious (I hope!).
Of course I wasn't serious. But it surely would be ironic, in the future, if academia comes up with that value as the right optimal number. :shock:

RM
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Re: Optimal Number of Mutual Funds

Post by kenyan » Thu Feb 13, 2014 6:21 pm

Random Musings wrote:
Of course I wasn't serious.

RM
And don't call me Shirley.

Oops...that didn't work.
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Re: Optimal Number of Mutual Funds

Post by placeholder » Fri Feb 14, 2014 1:38 am

Enough to do the job.

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frugaltype
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Re: Optimal Number of Mutual Funds

Post by frugaltype » Fri Feb 14, 2014 8:24 am

sometimesinvestor wrote:Older folks defined as people who started investing before 1980 are likely to have many funds.
Older folk here. I'm retired. I have mostly long term CDs and some Wellesley. That's it. When I was younger, I had mostly individual stocks, maybe ten, and CDs. I did have some Twentieth Century funds, 1 or 2, for some years.

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Re: Optimal Number of Mutual Funds

Post by midareff » Fri Feb 14, 2014 8:56 am

abuss368 wrote:
baw703916 wrote:abuss368,

If you are happy with your portfolio, then whatever the number you have (4 according to your signature) is the right number for you. So I'm not sure what you are getting at with this question.

I have a lot more than four, but a lot less than 38. It works for me. Reducing the number of funds as much as possible simply isn't that important to me. If others put more value in simplicity than I do, then they should probably hold fewer funds.

Brad
I agree. I was curious from other Bogleheads perspective.

We have five funds in each account:

* Total Stock Index
* Total International Index
* US REIT
* International REIT
* Total Bond Index/Intermediate Term Tax Exempt
You are getting me confused Abuss. That's 6 funds listed without the Tips you used? to hold. With 5 in each account is that 10 funds? I thought you were a three fund guy?

I've got 6 in taxable, 5 in my TIRA and 2 in a Roth. I'm calling it 13, that's how many lines it takes on the spread sheet.

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Re: Optimal Number of Mutual Funds

Post by dbr » Fri Feb 14, 2014 9:09 am

abuss368 wrote:
dbr wrote:A more serious answer to the question is that I think many people end up with more or fewer funds to a large extent according to the number of different places they end up with accounts in which certain choices are or are not available.

What the OP is really asking about is the theory of slice and dice investing and tilting and he is really asking about how many asset classes or subclasses should be held independently. He is even mooting the suggestion that the assumed benfits of muti-class investing meet a point of diminishing returns at 4-5 asset classes. I am not sure if this conversation is about asset classes within equities or includes bonds or extends to "alternate" investments.
Pretty much just an open thread to gauge other Boglehead strategies. One reads Jack Bogle's books where he recommends a fund or two, possibly three. David Swensen had recommended 6 funds and noted that any allocation with less than 5% - 10% is meaningless, and Warren Buffett was on CNBC noting investors should invest in a few or a handful index funds.
You used the word "optimal" and you referred to slice and dice. If your question isn't about the classic risk and return question of Modern Portfolio Theory, then you have lost me and I have no answer for you.

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abuss368
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Fri Feb 14, 2014 9:11 am

midareff wrote:
abuss368 wrote:
baw703916 wrote:abuss368,

If you are happy with your portfolio, then whatever the number you have (4 according to your signature) is the right number for you. So I'm not sure what you are getting at with this question.

I have a lot more than four, but a lot less than 38. It works for me. Reducing the number of funds as much as possible simply isn't that important to me. If others put more value in simplicity than I do, then they should probably hold fewer funds.

Brad
I agree. I was curious from other Bogleheads perspective.

We have five funds in each account:

* Total Stock Index
* Total International Index
* US REIT
* International REIT
* Total Bond Index/Intermediate Term Tax Exempt
You are getting me confused Abuss. That's 6 funds listed without the Tips you used? to hold. With 5 in each account is that 10 funds? I thought you were a three fund guy?

I've got 6 in taxable, 5 in my TIRA and 2 in a Roth. I'm calling it 13, that's how many lines it takes on the spread sheet.
I did not mean to confuse you. Basically we substitute Intermediate Tax Exempt Bonds for Total Bond in the taxable account. We use the same funds.
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

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midareff
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Re: Optimal Number of Mutual Funds

Post by midareff » Fri Feb 14, 2014 9:13 am

[quote="YDNAL Each one of us should seek diversification and 40x plans, for instance, may require holding more funds to accomplish. A taxable investor, for instance, may require multiple funds to harvest losses. We are all different, so we each own our optimal number of investments.[/quote]

+1

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abuss368
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Re: Optimal Number of Mutual Funds

Post by abuss368 » Fri Feb 14, 2014 9:14 am

It has become clearer to me on this thread that there is no "right" answer. An investor has to determine what works for them.
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

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Re: Optimal Number of Mutual Funds

Post by midareff » Fri Feb 14, 2014 9:16 am

[quote="abuss368I did not mean to confuse you. Basically we substitute Intermediate Tax Exempt Bonds for Total Bond in the taxable account. We use the same funds.[/quote]


Abuss368 ... Total Bond and IT Tax-Ex are not even close to being the same fund, other than they both are Intermediate Term. If you held additional IT Corporates (which some are already held in Total) would you continue to count that as one fund since they are all IT?

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