Jack Bogle - Two Fund Portfolio

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Incendiary
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Re: Jack Bogle - Two Fund Portfolio

Post by Incendiary » Wed Aug 02, 2017 6:32 am

siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
Why not?

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siamond
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Re: Jack Bogle - Two Fund Portfolio

Post by siamond » Wed Aug 02, 2017 9:26 am

Incendiary wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
Why not?
Because aiming at a 30/70 portfolio by the time you retire has a very good chance of badly backfiring after a couple of decades of retirement, as backtesting with retirement calculators clearly shows. Let me suggest you play around with Firecalc or cFIREsim in this respect, and you'll probably appreciate my point. I am not saying that 30/70 is bad for everybody, it all depends on your personal circumstances, but it certainly doesn't appear to be a great starting point for the average retiree.

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Re: Jack Bogle - Two Fund Portfolio

Post by Gort » Wed Aug 02, 2017 12:34 pm

siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.

If you qualify for Admiral shares then splitting the LifeStrategy fund into individual components will result in a lower ER than the LifeStrategy fund. (Of course that obviously adds some complexity which some folks do not want). This leads me to my question; Even with the higher ER I wonder if the LifeStategy fund has better perfomance than using individual Admiral share funds given missed opportunities to rebalance by the individual investor?

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Re: Jack Bogle - Two Fund Portfolio

Post by triceratop » Wed Aug 02, 2017 12:36 pm

Gort wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.

If you qualify for Admiral shares then splitting the LifeStrategy fund into individual components will result in a lower ER than the LifeStrategy fund. (Of course that obviously adds some complexity which some folks do not want). This leads me to my question; Even with the higher ER I wonder if the LifeStategy fund has better perfomance than using individual Admiral share funds given missed opportunities to rebalance by the individual investor?
Assuming you don't mean the inability of an individual investor to rebalance daily, I imagine it's rather behavioral whether an investor fails to rebalance at the bottom of a bear market. In that case, it could pay enormous benefits to be in a LS type fund. This kind of thing is hard to quantify, though.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Jack Bogle - Two Fund Portfolio

Post by David Jay » Wed Aug 02, 2017 12:47 pm

Gort wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.

If you qualify for Admiral shares then splitting the LifeStrategy fund into individual components will result in a lower ER than the LifeStrategy fund. (Of course that obviously adds some complexity which some folks do not want).
Gort:

This is exactly my case.

I have a 6-fund portfolio (started with Coffeehouse, then simplified some of the stock funds into Total Stock Market), but I want to leave my spouse with the simplest possible portfolio. So at age 70 I intend to transition to one LifeStrategy fund (likely "moderate" at 60/40) inside a Roth. I will be spending down my tIRA to delay SS to age 70 and also doing some conversions as part of the plan.
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siamond
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Re: Jack Bogle - Two Fund Portfolio

Post by siamond » Wed Aug 02, 2017 1:00 pm

triceratop wrote:
Gort wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that. [..]
If you qualify for Admiral shares then splitting the LifeStrategy fund into individual components will result in a lower ER than the LifeStrategy fund. (Of course that obviously adds some complexity which some folks do not want). This leads me to my question; Even with the higher ER I wonder if the LifeStategy fund has better perfomance than using individual Admiral share funds given missed opportunities to rebalance by the individual investor?
Assuming you don't mean the inability of an individual investor to rebalance daily, I imagine it's rather behavioral whether an investor fails to rebalance at the bottom of a bear market. In that case, it could pay enormous benefits to be in a LS type fund. This kind of thing is hard to quantify, though.
Yes, completely agreed. I was primarily suggesting LifeStrategy funds for people who want to keep their (financial) life very simple, and/or to protect themselves against behavioral mistakes. As a side note, the ER is 0.15% for LifeStrategy funds, that's pretty cool, and savings a few basis points on that might be nice, but will not go very far.

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Re: Jack Bogle - Two Fund Portfolio

Post by KarenC » Wed Aug 02, 2017 1:02 pm

siamond wrote:
Incendiary wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
Why not?
Because aiming at a 30/70 portfolio by the time you retire has a very good chance of badly backfiring after a couple of decades of retirement, as backtesting with retirement calculators clearly shows. Let me suggest you play around with Firecalc or cFIREsim in this respect, and you'll probably appreciate my point. I am not saying that 30/70 is bad for everybody, it all depends on your personal circumstances, but it certainly doesn't appear to be a great starting point for the average retiree.
To be precise, the Vanguard Target Retirement Funds glide path aims for 50/50 at retirement and 30/70 7 years after that.
"How much you know is less important than how clearly you understand where the borders of your ignorance begin." — Jason Zweig

Kennyt7
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Re: Jack Bogle - Two Fund Portfolio

Post by Kennyt7 » Wed Aug 02, 2017 1:08 pm

thought the gold standard is MPT

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Re: Jack Bogle - Two Fund Portfolio

Post by saltycaper » Wed Aug 02, 2017 1:30 pm

Kennyt7 wrote:thought the gold standard is MPT
Nawww... Ignorance is the gold standard. :)
Quod vitae sectabor iter?

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Re: Jack Bogle - Two Fund Portfolio

Post by azanon » Wed Aug 02, 2017 1:45 pm

It might have already been touched on to some degree, but I would say the Bogle portfolio would be roughly some mix of Total US stock market and VG Intermediate-Term Bond Index Fund (as opposed to Total Bond Index), depending on your age/how far along in your career.

Bogle said numerous times he prefers a 50/50 mix of treasuries and non-treasures (Total Bond has 70% Treasuries), and I also believe he prefers Intermediate- term duration bonds, whereas Total Bond Index is a mixture of short, medium, and long duration bonds, so VG's Intermediate-Term Bond Index fits this preference of his to a "T".

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Re: Jack Bogle - Two Fund Portfolio

Post by azanon » Wed Aug 02, 2017 1:46 pm

[quote="azanon"]It might have already been touched on to some degree, but I would say the Bogle portfolio would be roughly some mix of Total US stock market and VG Intermediate-Term Bond Index Fund (as opposed to Total Bond Index), depending on your age/how far along in your career.

Bogle said numerous times he prefers a 50/50 mix of treasuries and non-treasures (Total Bond has 70% Treasuries), and I also believe he prefers Intermediate- term duration bonds, whereas Total Bond Index is a mixture of short, medium, and long duration bonds, so VG's Intermediate-Term Bond Index fits this preference of his to a "T".

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Re: Jack Bogle - Two Fund Portfolio

Post by azanon » Wed Aug 02, 2017 1:46 pm

It might have already been touched on to some degree, but I would say the Bogle portfolio would be roughly some mix of Total US stock market and VG Intermediate-Term Bond Index Fund (as opposed to Total Bond Index), depending on your age/how far along in your career.

Bogle said numerous times he prefers a 50/50 mix of treasuries and non-treasures (Total Bond has 70% Treasuries), and I also believe he prefers Intermediate- term duration bonds, whereas Total Bond Index is a mixture of short, medium, and long duration bonds, so VG's Intermediate-Term Bond Index fits this preference of his to a "T".

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Re: Jack Bogle - Two Fund Portfolio

Post by Incendiary » Wed Aug 02, 2017 5:47 pm

azanon, you can say that again! And again! :D

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Re: Jack Bogle - Two Fund Portfolio

Post by Gort » Wed Aug 02, 2017 6:45 pm

Incendiary wrote:azanon, you can say that again! And again! :D
+3 :happy

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Re: Jack Bogle - Two Fund Portfolio

Post by rattlenap » Thu Aug 03, 2017 10:33 pm

stemikger wrote:
rattlenap wrote:I do the Vanguard Balanced Index fund and plan on being in that for the rest of my life.
Awesome!! Same here!

Unfortunately, my 401K does not have the balanced index fund, so I hold two funds, but it comes to the same AA (60/40).

I do hold the Balanced Index in my TIRA and upon retirement, it will all go in the balanced index fund (for life).

:sharebeer
How long have you been doing the Balanced Index Fund?

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Re: Jack Bogle - Two Fund Portfolio

Post by stemikger » Fri Aug 04, 2017 12:37 am

rattlenap wrote:
stemikger wrote:
rattlenap wrote:I do the Vanguard Balanced Index fund and plan on being in that for the rest of my life.
Awesome!! Same here!

Unfortunately, my 401K does not have the balanced index fund, so I hold two funds, but it comes to the same AA (60/40).

I do hold the Balanced Index in my TIRA and upon retirement, it will all go in the balanced index fund (for life).

:sharebeer
How long have you been doing the Balanced Index Fund?
I just have a small amount in it in my TIRA. I look at it as a placeholder for when I switch my entire 401K into it. I jumped in and out of it, at one point it was all in the Vanguard Total Market Index, but that was a lapse in judgment.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Mon Aug 07, 2017 6:29 pm

stemikger wrote:
I just have a small amount in it in my TIRA. I look at it as a placeholder for when I switch my entire 401K into it. I jumped in and out of it, at one point it was all in the Vanguard Total Market Index, but that was a lapse in judgment.
Keep investing simple!
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

DeadPoets
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Re: Jack Bogle - Two Fund Portfolio

Post by DeadPoets » Wed Aug 15, 2018 12:10 pm

siamond wrote:
Tue Aug 01, 2017 11:33 pm
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
There’s not much of a difference between TR funds and life strategy funds in terms of allocation. So would you care to elaborate why you’re against TR funds in favor of LS funds?

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Re: Jack Bogle - Two Fund Portfolio

Post by bikechuck » Wed Aug 15, 2018 1:14 pm

oldzey wrote:
Wed Aug 02, 2017 12:24 am
Affirmative - I use two funds:

Total U.S. Stock Market Index Fund
TIAA Traditional
Will you consider annuitizing the TIAA Traditional at some future date? I have it as well but do not own enough of it to fill my bond space. I might annuitize it in my 70s if for no other reason than to make things dirt simple for my wife after I die as I have been unable to get her to take an interest in our portfolio.

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Re: Jack Bogle - Two Fund Portfolio

Post by ignition » Wed Aug 15, 2018 1:19 pm

JoMoney wrote:
Fri Apr 01, 2016 8:57 pm
I follow Buffett's advice of keeping enough in cash (including short-term low risk bonds) that I feel comfortable and putting the rest in a low-cost S&P500 fund.
Why S&P500 and not VTSAX?

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Re: Jack Bogle - Two Fund Portfolio

Post by JoMoney » Wed Aug 15, 2018 1:31 pm

ignition wrote:
Wed Aug 15, 2018 1:19 pm
JoMoney wrote:
Fri Apr 01, 2016 8:57 pm
I follow Buffett's advice of keeping enough in cash (including short-term low risk bonds) that I feel comfortable and putting the rest in a low-cost S&P500 fund.
Why S&P500 and not VTSAX?
viewtopic.php?f=1&t=250440#p3949740
"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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siamond
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Re: Jack Bogle - Two Fund Portfolio

Post by siamond » Wed Aug 15, 2018 1:36 pm

DeadPoets wrote:
Wed Aug 15, 2018 12:10 pm
siamond wrote:
Tue Aug 01, 2017 11:33 pm
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
There’s not much of a difference between TR funds and life strategy funds in terms of allocation. So would you care to elaborate why you’re against TR funds in favor of LS funds?
Well, there is a very fundamental difference. A LifeStrategy fund is a fixed allocation for life, period. A Target Retirement fund follows a glide path increasing bonds exposure over time, with a rather stiff change towards the years after retirement. Such glide path is very poorly designed, strongly favoring short-term considerations (volatility) against longer term considerations (low income risk; inflation risk), and it's basically a one size-fits-all approach that probably doesn't really fit anybody... Running the numbers with historical data clearly shows that nearly everybody would have been much better with a simple, fixed allocation.

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Re: Jack Bogle - Two Fund Portfolio

Post by vineviz » Wed Aug 15, 2018 1:59 pm

siamond wrote:
Wed Aug 15, 2018 1:36 pm
DeadPoets wrote:
Wed Aug 15, 2018 12:10 pm
siamond wrote:
Tue Aug 01, 2017 11:33 pm
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
There’s not much of a difference between TR funds and life strategy funds in terms of allocation. So would you care to elaborate why you’re against TR funds in favor of LS funds?
Well, there is a very fundamental difference. A LifeStrategy fund is a fixed allocation for life, period. A Target Retirement fund follows a glide path increasing bonds exposure over time, with a rather stiff change towards the years after retirement. Such glide path is very poorly designed, strongly favoring short-term considerations (volatility) against longer term considerations (low income risk; inflation risk), and a one size-fits-all approach that probably doesn't really fit anybody... Running the numbers with historical data clearly shows that nearly everybody would have been much better with a simple, fixed allocation.
By definition there must exist, for any particular set of assumptions, some single lifetime asset allocation that will match the end result of a formulaic changing asset allocation. Over most reasonable sets of assumptions, it turns out that a simple 60/40 lifetime allocation has about the chance of meeting the retirement income needs of an investor who follows a typical "target date fund" glide path. The target date fund actually is less risky, but I'm not sure the average investor would notice the additional time diversification the TDF provides.

Thankfully, there is nothing that binds an investor to a single fund choice for life. Using a target date fund during the accumulation period and a 60/40 LifeStrategy fund during the retirement withdrawal period turns out to be superior to using either fund by itself. It doesn't have to be either/or.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

bikechuck
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Re: Jack Bogle - Two Fund Portfolio

Post by bikechuck » Wed Aug 15, 2018 2:11 pm

Vanguard's balanced funds all seem to have more international exposure than I would like.

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Wed Aug 15, 2018 2:55 pm

bikechuck wrote:
Wed Aug 15, 2018 2:11 pm
Vanguard's balanced funds all seem to have more international exposure than I would like.
For investors not happy with the inclusion of international securities in balanced funds, Jack’s Two Fund Portfolio may be an attractive strategy.
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

maj
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Re: Jack Bogle - Two Fund Portfolio

Post by maj » Wed Aug 15, 2018 3:15 pm

for 60/40 investors, who want only 20% international stock,
I know folks who hold
Vanguard Balanced Index Fund and
Vanguard LifeStrategy Moderate Growth Fund,
keep them more or less balanced at 50%-50% or 'let 'em run unbalanced'
About 11 cost basis points per annum
Very happy investors

Also know of a small endowment which invests as described above--and it matches or beats most expensive endowment funds over 10 year periods

peace

DeadPoets
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Re: Jack Bogle - Two Fund Portfolio

Post by DeadPoets » Wed Aug 15, 2018 3:27 pm

siamond wrote:
Wed Aug 15, 2018 1:36 pm
DeadPoets wrote:
Wed Aug 15, 2018 12:10 pm
siamond wrote:
Tue Aug 01, 2017 11:33 pm
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
There’s not much of a difference between TR funds and life strategy funds in terms of allocation. So would you care to elaborate why you’re against TR funds in favor of LS funds?
Well, there is a very fundamental difference. A LifeStrategy fund is a fixed allocation for life, period. A Target Retirement fund follows a glide path increasing bonds exposure over time, with a rather stiff change towards the years after retirement. Such glide path is very poorly designed, strongly favoring short-term considerations (volatility) against longer term considerations (low income risk; inflation risk), and it's basically a one size-fits-all approach that probably doesn't really fit anybody... Running the numbers with historical data clearly shows that nearly everybody would have been much better with a simple, fixed allocation.
I gotcha. Ya, I guess someone with a TR fund that's getting a bit too conservative in allocation could just exchange it for a later date TR fund.

But to your point... why exchange TR funds with other TR funds when in 5 years you might have to re-allocate again as glidepath changes things.

I set my wife up (30 years old) with the most recent TR Fund 2065. That assures that she'll be 90/10 or 85/15 until she's 65. That's a pretty solid plan for a passive investor.

I, on the other-hand, will be using a 2 portfolio setup in my IRA (Total US Stock & Total Bond Index). I'll rebalance as I see fit.

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Re: Jack Bogle - Two Fund Portfolio

Post by willthrill81 » Wed Aug 15, 2018 3:47 pm

gvsucavie03 wrote:
Sat Apr 02, 2016 5:57 am
I think there is a lot of wisdom in this model, but I also think it is prudent to diversify with non-US stock. The global economy is very different now than when Bogle and Buffet started investing. There has to be at least a small amount of bias in their opinion of International markets.
Yes it has. And over the last 30 years of their investing careers, U.S. equities have blown away international. There have been periods where international has outperformed, but the sum total is that U.S. equities have had more than double the annual returns of international for multiple decades and counting. That's enough to 'bias' just about anyone's opinions.

It may well indeed prove to be prudent in the future to diversify with international. But those who have done so for the last several decades have not been rewarded; indeed, they've been harshly penalized.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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siamond
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Re: Jack Bogle - Two Fund Portfolio

Post by siamond » Wed Aug 15, 2018 3:55 pm

DeadPoets wrote:
Wed Aug 15, 2018 3:27 pm
I gotcha. Ya, I guess someone with a TR fund that's getting a bit too conservative in allocation could just exchange it for a later date TR fund.
Yes, sure, if you have the inclination to think a bit harder about it, you can game the TR system and make it work ok. If one is constrained by limited choices in a 401k, this makes sense. But if you have open options at your disposal, then why make it complicated, just go for a LifeStrategy fund, stay the course, and only revisit after or close to really big life changes...

I believe this was the spirit of the OP with the two-funds portfolio, and my point is that one can go one step further, and simply use a one fund portfolio which is more diversified (incl. international)...

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Re: Jack Bogle - Two Fund Portfolio

Post by afan » Wed Aug 15, 2018 3:55 pm

I do 3 fund. I accept the logic of international stocks and don't see a downside. With the correlation between US and total international stocks so high, it does not make much difference but the theory makes sense to me.

A while ago Vanguard did a study that showed that varying the mix of US and international had not effect on returns over a fairly broad range. But having some international was better than having none.


Many US companies get much of their revenue from overseas. Many foreign companies get much of their revenue from the US. Distinguishing them by where there headquarters are located is somewhat arbitrary. With inversions, the same company can be US one day and foreign the next.

I don't do international bonds. I worry that international bond prices are too susceptible to political manipulation. Many countries forced down their interest rates to come out of the recession. Many are still down. A large number of the largest banks are essentially forced by their regulators to buy low yielding government debt.

In other words, large as the market may be, it looks ripe for manipulation and I believe that is going on. It seems much more difficult and much less common for countries to control and inflate their stock prices.

When we retire we will consolidate retirement assets and have the same 3 fund design but we will be able to accomplish it with the same 3 funds for everything.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

DeadPoets
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Re: Jack Bogle - Two Fund Portfolio

Post by DeadPoets » Wed Aug 15, 2018 4:12 pm

afan wrote:
Wed Aug 15, 2018 3:55 pm
I do 3 fund. I accept the logic of international stocks and don't see a downside. With the correlation between US and total international stocks so high, it does not make much difference but the theory makes sense to me.

A while ago Vanguard did a study that showed that varying the mix of US and international had not effect on returns over a fairly broad range. But having some international was better than having none.


Many US companies get much of their revenue from overseas. Many foreign companies get much of their revenue from the US. Distinguishing them by where there headquarters are located is somewhat arbitrary. With inversions, the same company can be US one day and foreign the next.

I don't do international bonds. I worry that international bond prices are too susceptible to political manipulation. Many countries forced down their interest rates to come out of the recession. Many are still down. A large number of the largest banks are essentially forced by their regulators to buy low yielding government debt.

In other words, large as the market may be, it looks ripe for manipulation and I believe that is going on. It seems much more difficult and much less common for countries to control and inflate their stock prices.

When we retire we will consolidate retirement assets and have the same 3 fund design but we will be able to accomplish it with the same 3 funds for everything.
US is no different.

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Re: Jack Bogle - Two Fund Portfolio

Post by Dandy » Thu Aug 16, 2018 6:26 am

It seems strange to me that people admire Buffet's 90/10 retiree allocation. Many wouldn't recommend that for a person in the early accumulation stage. Buffet is a great investor but he doesn't invest a la a Boglehead. He is a value investor aka market timer that is sitting on 111 billion waiting for deep value before jumping in and buying whole companies or lending to companies at high risk for a sweet interest rate. He is an optimist and a great believer in the US equity market.

I tip my hat to him but wouldn't be signing on to his retiree asset allocation suggestions. You need to consider your asset level, income, expenses, risk tolerance, amount of human capital, diversity,etc. and formulate your own allocation. I really doubt that doing that will result in anything like a 90/10 allocation if you are near or in retirement.

Also the quest for simplicity is a good thing but care must be taken when making trade offs between simplicity and other factors like diversity. I think a TD or Life Strategy Fund is probably a better choice than a Balanced Index only or the suggested 2 fund portfolio. I think that some of the problems people feel about having a handful of funds is that they are overly focused on rebalancing. To me, in most cases, keeping the overall equity/fixed income allocation within say a 5% band is pretty much all that is needed.

columbia
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Re: Jack Bogle - Two Fund Portfolio

Post by columbia » Thu Aug 16, 2018 6:29 am

One could do a lot worse than TSM/SP500/Total world & TBM/Short or intermediate treasuries.

Why complicate things?

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Re: Jack Bogle - Two Fund Portfolio

Post by arf30 » Thu Aug 16, 2018 6:43 am

In taxable I do a 2 fund portfolio, a 75/25 split of total US and total international. If I had to start over I'd probably use the single total world ETF with its 50/50 split, but I'm stuck now due to cost basis and taxes.

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abuss368
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sun Nov 04, 2018 8:22 pm

I am curious for any updates from Bogleheads in terms of who uses Jack Bogle's recommended Two Fund Portfolio (i.e. Total Stock & Total Bond). Has anyone moved to this portfolio over time or plan too?
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: Jack Bogle - Two Fund Portfolio

Post by tomd37 » Sun Nov 04, 2018 9:08 pm

abuss368 - We are in our early 80s and have simplified our portfolio to those two funds over the years. At our age I have no interest in having any international stock allocation as part of our current 40/60 stock bond allocation. Twenty percent of forty percent is only eight percent and I don't see any advantage to that. I like the KISS idea.
Tom D.

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theduke
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Re: Jack Bogle - Two Fund Portfolio

Post by theduke » Sun Nov 04, 2018 10:10 pm

I am retired and happy with the two funds. KISS

UpperNwGuy
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Re: Jack Bogle - Two Fund Portfolio

Post by UpperNwGuy » Sun Nov 04, 2018 10:21 pm

abuss368 wrote:
Sun Nov 04, 2018 8:22 pm
I am curious for any updates from Bogleheads in terms of who uses Jack Bogle's recommended Two Fund Portfolio (i.e. Total Stock & Total Bond). Has anyone moved to this portfolio over time or plan too?
I am in my late 60s and have been retired for 5 years. I currently have a four fund portfolio of Total Stock, Total International, Total Bond, and Intermediate Tax Exempt. Sometime between the ages of 75 and 80 I plan to consolidate to a two fund portfolio of Total Stock and Total Bond.

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oldzey
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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey » Sun Nov 04, 2018 11:32 pm

oldzey wrote:
Wed Aug 02, 2017 12:24 am
Affirmative - I use two funds:

Total U.S. Stock Market Index Fund
TIAA Traditional
Still staying the course with these two funds. :beer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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birdog
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Re: Jack Bogle - Two Fund Portfolio

Post by birdog » Mon Nov 05, 2018 4:31 am

I have recently moved to VTI (total stock market) and BIV (inter bond index) with some VTEB (tax-free bond index) in taxable due to my tax bracket.

xxd091
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Re: Jack Bogle - Two Fund Portfolio

Post by xxd091 » Mon Nov 05, 2018 5:11 am

Hi All
From the UK
Early seventies-retired 14 years
Now at 70/30 Bonds /Equities-made my pile and don’t want to lose it!
Use Vanguard World Index Fund plus Vanguard Global Bond Index Fund-hedged to the pound
2 funds-simple-especially for my wife who has little interest in managing money
Probably keep this Portfolio to the finish-will not go below 30% Equities
All learnt from John Boglehead and contributors to his forum
I keep looking at one fund to make life even simpler as we both age -it might be a final move
Our Vanguard LifeStrategy Funds over here have too much of a home bias so probably not
xxd091

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Re: Jack Bogle - Two Fund Portfolio

Post by indexonlyplease » Mon Nov 05, 2018 5:35 am

KarenC wrote:
Wed Aug 02, 2017 1:02 pm
siamond wrote:
Incendiary wrote:
siamond wrote:
abuss368 wrote:How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?
Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
Why not?
Because aiming at a 30/70 portfolio by the time you retire has a very good chance of badly backfiring after a couple of decades of retirement, as backtesting with retirement calculators clearly shows. Let me suggest you play around with Firecalc or cFIREsim in this respect, and you'll probably appreciate my point. I am not saying that 30/70 is bad for everybody, it all depends on your personal circumstances, but it certainly doesn't appear to be a great starting point for the average retiree.
To be precise, the Vanguard Target Retirement Funds glide path aims for 50/50 at retirement and 30/70 7 years after that.
This is a good point. 50/50 at retirement sounds good for someone at 65. I think the more important part of the Target Dated Fund is for the person that never wants to learn about investing or learn to late. So the problem with the Lifestyle is someone need to know when to change from the 80/20 to the 40/60 Lifestyle fund.

Thanks, Karen

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Re: Jack Bogle - Two Fund Portfolio

Post by indexonlyplease » Mon Nov 05, 2018 5:37 am

indexonlyplease wrote:
Mon Nov 05, 2018 5:35 am
KarenC wrote:
Wed Aug 02, 2017 1:02 pm
siamond wrote:
Incendiary wrote:
siamond wrote: Seems to me that the folks seeking such level of simplicity would be much better off with a single LifeStrategy fund (pick the one you like based on your tolerance for volatility, and be done with it). This is the recommendation I make to many people I speak with, when I sense that they really don't want to hear much more than that.

PS. I would *not* recommend a Target-Date fund though. Definitely not.
Why not?
Because aiming at a 30/70 portfolio by the time you retire has a very good chance of badly backfiring after a couple of decades of retirement, as backtesting with retirement calculators clearly shows. Let me suggest you play around with Firecalc or cFIREsim in this respect, and you'll probably appreciate my point. I am not saying that 30/70 is bad for everybody, it all depends on your personal circumstances, but it certainly doesn't appear to be a great starting point for the average retiree.
To be precise, the Vanguard Target Retirement Funds glide path aims for 50/50 at retirement and 30/70 7 years after that.
This is a good point. 50/50 at retirement sounds good for someone at 65. I think the more important part of the Target Dated Fund is for the person that never wants to learn about investing or learn to late. So the problem with the Lifestyle is someone need to know when to change from the 80/20 to the 40/60 Lifestyle fund.

With all the investment ideas I think we should spend more time on the mistakes people make in investing. I think that hurt investor more than any portfolio.

Thanks, Karen

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