Jack Bogle - Two Fund Portfolio

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Re: Jack Bogle - Two Fund Portfolio

Post by bertilak »

Taylor Larimore wrote: Sat Nov 23, 2019 6:44 pm Today, I sometimes wonder if my Three-Fund Portfolio might be even better as a Two-Fund Portfolio. Both are champs in the investing arena.
I have a 4-fund portfolio which includes international stocks and bonds. (I think of international bonds as the fourth fund of my three-fund portfolio!)

I sometimes wonder if that's two too many but I have a plan. If those extra two don't keep up I will progressively let domestic assets carry more and more of the load by not rebalancing back into international. After all, I have international as a hedge for safety rather than as a way to boost return. If they ever actually do either of those jobs, they will climb back towards their original allocation without my help; if not, good riddance!
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

bertilak wrote: Mon Nov 25, 2019 9:45 am
Taylor Larimore wrote: Sat Nov 23, 2019 6:44 pm Today, I sometimes wonder if my Three-Fund Portfolio might be even better as a Two-Fund Portfolio. Both are champs in the investing arena.
I have a 4-fund portfolio which includes international stocks and bonds. (I think of international bonds as the fourth fund of my three-fund portfolio!)

I sometimes wonder if that's two too many but I have a plan. If those extra two don't keep up I will progressively let domestic assets carry more and more of the load by not rebalancing back into international. After all, I have international as a hedge for safety rather than as a way to boost return. If they ever actually do either of those jobs, they will climb back towards their original allocation without my help; if not, good riddance!
Hi bertilak -

I understand and for well over a decade did the same. However, it felt at times that all we were doing was buying international non-stop as it very rarely stayed at the desired asset allocation. For the additional risk the there was no additional reward! There would be very long periods because of this where we were not buying anything but international. Finally we said "enough" and decided to listen to Jack Bogle and Warren Buffett.

If alternatively we would have been buying Total Stock all along (instead of international), by now our portfolio would be night and day different!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by bertilak »

abuss368 wrote: Mon Nov 25, 2019 4:24 pm ... it felt at times that all we were doing was buying international non-stop.
I don't invest or rebalance into international, only domestic. The only investig I do is dividends, which all go into the settlement fund.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

bertilak wrote: Mon Nov 25, 2019 5:11 pm
abuss368 wrote: Mon Nov 25, 2019 4:24 pm ... it felt at times that all we were doing was buying international non-stop.
I don't invest or rebalance into international, only domestic. The only investig I do is dividends, which all go into the settlement fund.
Got it. Are you by chance retired? Why not simply sell international and simplify?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Taylor Larimore wrote: Thu Nov 21, 2019 4:34 pm
abuss368:

Thank you for your post. Few things make me happier than knowing I helped someone become a better investor.

Best wishes
Taylor
Jack Bogle's Words of wisdom: "Deep down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio."
Hi Taylor -

You have helped in so many ways and I will always remember that and forever be thankful for the time and wisdom you have shared over the years.

Best.
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Re: The "B&B Portfolio"

Post by abuss368 »

oldzey wrote: Mon Nov 25, 2019 12:58 am
abuss368 wrote: Sun Nov 24, 2019 2:06 pm
oldzey wrote: Sun Nov 24, 2019 2:02 pm
Taylor Larimore wrote: Sun Nov 24, 2019 11:28 am
abuss368 wrote: Sun Nov 24, 2019 11:00 amBuilt in gains? For the allocation we had in taxable and the up and downs of International all the time, we partly did that and also bit the bullet to move to The Bogle and Buffett portfolio.
abuss368:

I suggest we call your two-fund Bogle and Buffett portfolio the "B & B" Portfolio."

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The index fund offers the broadest possible diversification, the lowest possible cost, the longest time horizon, and the greatest possible tax efficiency. Simplicity writ large!"
"B & B" Portfolio" is the perfect name for it, Taylor!

I would suggest that marketwatch.com consider adding it Paul B. Farrell's Lazy Portfolios: https://www.marketwatch.com/lazyportfolio

Best,
oldzey
Is that possible to do? I was always curious why a website with a variety of index funds portfolios never included Jack Bogle’s recommenced portfolio.
According to marketwatch.com, Mr. Farrell's email is: PaulBFarrell@charter.net

Caveat - I do not know if his email is current.
Bogleheads -

I have decided to send a message to Paul Farrell to request that we get the B&B Portfolio added in honor of Mr. Bogle (and Warren Buffett).
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Bogleheads -

As promised I sent a message to Mr. Paul Farrell at MarketWatch to kindly request that they consider adding the Jack Bogle (and Warren Buffett) portfolios

*************************************************
Hi Mr. Farrell -

I would like to express how much I have enjoyed the Lazy Portfolios website (https://www.marketwatch.com/lazyportfolio) over the years and also, to respectfully request if a portfolio could possibly be added to the list in honor of both Jack Bogle and Warren Buffett.

Both Mr. Bogle and Mr. Buffett have recommended consistently over the years a very simple yet sophisticated Two Fund Portfolio (Jack Bogle - Total Stock and Total Bond….Warren Buffett - S&P 500 and Short Term Treasury Bond Fund). Mr. Bogle’s crusade to ensure that the little guy earn their fair share, his vision, and leadership created what Vanguard has become today. It is reasonable to consider Mr. Bogle “the Father of Indexing”.

Sadly, Mr. Bogle left us earlier this year, but with the Bogleheads and the many investors who he helped over the years, his message will forever live on. It is important that we honor that and grow his message. While others may have made a lot of money, Mr. Bogle chose to make a difference. Mr. Buffett has supported Mr. Bogle over the years and invited him to Omaha where he recognized his accomplishments. Mr. Buffett went on to recommend the 90% S&P 500 fund with 10% in Short Term Treasury Bonds and specifically Vanguard in his shareholder letter.

Interesting, on the Bogleheads website, the Jack Bogle Two Fund Portfolio has developed a name and following: "The B&B Portfolio” (Bogle & Buffett Portfolio).

Please consider adding a Two Fund B&B Portfolio consisting of Vanguard Total Stock and Vanguard Total Bond to the Lazy Portfolios.

Respectfully,
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

yogesh wrote: Mon Nov 25, 2019 1:16 am In addition can someone update our wiki:
https://www.bogleheads.org/wiki/Lazy_portfolios
Add: One fund portfolio (S&P 500 or TSM or TWM)
Add: Two fund B & B Portfolio (90% TSM / 10% TBM)
I added a post to the Wiki suggestions related to both the Jack Bogle - Two Fund Portfolio (Total Stock Total Bond) and Warren Buffett Two Fund Portfolio (S&P 500 and Short Term Treasury Bonds) and if they could possibly be considered.

Taylor branded this the B&B Portfolio!
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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey »

You could also write to Berkshire Hathaway, describing Taylor's name for the B & B portfolio.

Who knows, you might even get a response from Mr. Buffett himself!

https://www.berkshirehathaway.com/

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

oldzey wrote: Mon Nov 25, 2019 10:09 pm You could also write to Berkshire Hathaway, describing Taylor's name for the B & B portfolio.

Who knows, you might even get a response from Mr. Buffett himself!

https://www.berkshirehathaway.com/

BERKSHIRE HATHAWAY INC.
3555 Farnam Street
Omaha, NE 68131
My kid did this once. Read Mr. Buffett's book for children, took a picture holding the book in their school t shirt. Wrote a letter to Mr. Buffett and included the picture holding book and mailed to Omaha. Wouldn't one know it, Mr. Buffett's secretary wrote a letter back saying she showed Mr. Buffett. My kid was amazed!!!
Last edited by abuss368 on Mon Nov 25, 2019 10:37 pm, edited 1 time in total.
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Re: Jack Bogle - Two Fund Portfolio

Post by yogesh »

Suggest “Bogle & Buffett Portfolio” than “B & B Portfolio” if you get that past lawyers and loyalty.
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Re: Jack Bogle - Two Fund Portfolio

Post by Taylor Larimore »

oldzey wrote: Mon Nov 25, 2019 10:09 pm You could also write to Berkshire Hathaway, describing Taylor's name for the B & B portfolio.
oldzey:

As much as I admire the B & B two-fund portfolio, I prefer the Three-Fund Portfolio because it includes 20% international exposure for "portfolio insurance."

In December 1989 the Japanese Nikkei 225 Index was about 38,000. Today, 30 years later, the Nikkei 225 is about 22,000. Japanese investors who invested entirely in Japanese stocks, are devastated. This could happen to U.S. investors who invest entirely in U.S. stocks.

The return of our money is more important than the return on our money.

Best wishes.
Jack Bogle's Words of Wisdom (2018): "No one knows what tomorrow may bring. But I'm inclined to stick by my earlier conclusion that holdings of non-U.S. stocks should be limited to no more than 20% of equity."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog »

Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago and felt really good about it for awhile. I also had to come back to this forum to reassure myself of my decision in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat. When international starts to outperform, you'll start to wrong your hands a bit. You'll maybe start a thread asking if you should jump back into international but by then it's too late.

At some point I became enlightened. Maybe you will someday.

Good luck.
Last edited by lostdog on Tue Nov 26, 2019 12:02 am, edited 1 time in total.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago. I also had to come back to this forum to reassure myself in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat.

At some point I became enlightened. Maybe you will someday.

Good luck.
At this point I would not bet on that. I would bet on however if Mr. Bogle and Mr. Buffett recommended all these funds (International, REITs, etc.) and I went against that with one or two funds. Yes, in that example I would expect possible doubt at times. But in this instance I am listening to the recommendations of the best investors any of us will ever know. They know more about investing than any of us.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago and felt really good about it for awhile. I also had to come back to this forum to reassure myself of my decision in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat. When international starts to outperform, you'll start to wrong your hands a bit. You'll maybe start a thread asking if you should jump back into international but by then it's too late.

At some point I became enlightened. Maybe you will someday.

Good luck.
As Robert De Niro says “There is a flip side to that coin.” What if International investors (stocks) continue waiting for that higher expected return to compensate for the higher risk and it never shows up? Year, after year, after year. One will visit the thread of their choice and wonder whether they should have simply listened to Mr. Bogle and Mr. Buffett.
Last edited by abuss368 on Tue Nov 26, 2019 6:48 am, edited 1 time in total.
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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog »

abuss368 wrote: Tue Nov 26, 2019 12:01 am
lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago. I also had to come back to this forum to reassure myself in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat.

At some point I became enlightened. Maybe you will someday.

Good luck.
At this point I would not bet on that. I would bet on however if Mr. Bogle and Mr. Buffett recommended all these funds (International, REITs, etc.) and I went against that with one or two funds. Yes, in that example I would expect possible doubt at times. But in this instance I am listening to the recommendations of the best investors any of us will ever know. They know more about investing than any of us.
I agree with you. I was here too but then I finally got it.

Good luck.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

lostdog wrote: Tue Nov 26, 2019 12:07 am
abuss368 wrote: Tue Nov 26, 2019 12:01 am
lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago. I also had to come back to this forum to reassure myself in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat.

At some point I became enlightened. Maybe you will someday.

Good luck.
At this point I would not bet on that. I would bet on however if Mr. Bogle and Mr. Buffett recommended all these funds (International, REITs, etc.) and I went against that with one or two funds. Yes, in that example I would expect possible doubt at times. But in this instance I am listening to the recommendations of the best investors any of us will ever know. They know more about investing than any of us.
I agree with you. I was here too but then I finally got it.

Good luck.
Got what?
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Re: Jack Bogle - Two Fund Portfolio

Post by spdoublebass »

abuss368 wrote: Tue Nov 26, 2019 12:06 am
lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago and felt really good about it for awhile. I also had to come back to this forum to reassure myself of my decision in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat. When international starts to outperform, you'll start to wrong your hands a bit. You'll maybe start a thread asking if you should jump back into international but by then it's too late.

At some point I became enlightened. Maybe you will someday.

Good luck.
As Robert De Niro says “There is a flip side to that coin.” What if International investors (stocks and bonds) continue waiting for that higher expected return to compensate for the higher risk and it never shows up? Year, after year, after year. One will visit the thread of their choice and wonder whether they should have simply listened to Mr. Bogle and Mr. Buffett.
May I ask why you say international bond investors are waiting?
If you pull up Total bond, INT US dollar hedged, and US dollar unhedged bond and compare them TBM is 3rd since 1999, which is when the data starts.

Since vanguard introduced their Int bond fund, it has been leading TBM by about 1% cagr.

I’m not saying you should own international bonds, but am just curious what you mean by people waiting for them to show up.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

spdoublebass wrote: Tue Nov 26, 2019 4:27 am
abuss368 wrote: Tue Nov 26, 2019 12:06 am
lostdog wrote: Mon Nov 25, 2019 11:51 pm Abyss,

You could have used a target fund or life strategy fund and it would have been just as simple.

Looks like you fell into the rabbit hole of recency bias, home bias and investing based on authority. I did exactly what.you just did a few years ago and felt really good about it for awhile. I also had to come back to this forum to reassure myself of my decision in the all U.S. threads with virtual high fives with the same people. I'm sure you'll look for it in this thread when doubt sets in and you'll always have that little monkey called doubt just sitting there. You'll once again get your reassurance from your fellow two fund bogleheads to dampen that doubt. A few days, weeks or months later that doubt will.come back. Rinse and repeat. When international starts to outperform, you'll start to wrong your hands a bit. You'll maybe start a thread asking if you should jump back into international but by then it's too late.

At some point I became enlightened. Maybe you will someday.

Good luck.
As Robert De Niro says “There is a flip side to that coin.” What if International investors (stocks and bonds) continue waiting for that higher expected return to compensate for the higher risk and it never shows up? Year, after year, after year. One will visit the thread of their choice and wonder whether they should have simply listened to Mr. Bogle and Mr. Buffett.
May I ask why you say international bond investors are waiting?
If you pull up Total bond, INT US dollar hedged, and US dollar unhedged bond and compare them TBM is 3rd since 1999, which is when the data starts.

Since vanguard introduced their Int bond fund, it has been leading TBM by about 1% cagr.

I’m not saying you should own international bonds, but am just curious what you mean by people waiting for them to show up.
You are correct. I have edited my post to refer to International stocks only.
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Re: Jack Bogle - Two Fund Portfolio

Post by bertilak »

abuss368 wrote: Mon Nov 25, 2019 8:13 pm
bertilak wrote: Mon Nov 25, 2019 5:11 pm
abuss368 wrote: Mon Nov 25, 2019 4:24 pm ... it felt at times that all we were doing was buying international non-stop.
I don't invest or rebalance into international, only domestic. The only investig I do is dividends, which all go into the settlement fund.
Got it. Are you by chance retired? Why not simply sell international and simplify?
Yes, retired. (Whatever one's position, lazy thinking kicks in to leave unsaid "Isn't everybody?")

Selling would give me a big tax hit. Besides, internationals may save my bacon someday.
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Bonds are primarily for Safety--NOT higher Return

Post by Taylor Larimore »

Since vanguard introduced their Int bond fund, it has been leading TBM by about 1% cagr.
Bogleheads:

It is important to understand that bonds, CDs, cash, etc. are for Safety. Knowledgeable investors increase their stock allocation for Higher Return.

Nearly all the long-term return from bonds is from their yield. Almost without exception, bonds with the highest yields are the bond's with the highest risk of loss. It has been said "More money has been lost by investors seeking higher yield than has been lost at the point of a gun."

I chose Total Bond Market Index Fund for The Three-Fund Portfolio, not for it's yield, but primarily for its safety. Its worst annual loss since inception in 1986 was -2.66% (it gained +16% in 1987). TBM is now the largest bond fund in the world for good reasons.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Deep Down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio"
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey »

bertilak wrote: Tue Nov 26, 2019 9:20 am
abuss368 wrote: Mon Nov 25, 2019 8:13 pm
bertilak wrote: Mon Nov 25, 2019 5:11 pm
abuss368 wrote: Mon Nov 25, 2019 4:24 pm ... it felt at times that all we were doing was buying international non-stop.
I don't invest or rebalance into international, only domestic. The only investig I do is dividends, which all go into the settlement fund.
Got it. Are you by chance retired? Why not simply sell international and simplify?
Yes, retired. (Whatever one's position, lazy thinking kicks in to leave unsaid "Isn't everybody?")

Selling would give me a big tax hit. Besides, internationals may save my bacon someday.
Reminds me of Ben Carlson's 2014 quote:
"Diversification is about accepting good enough while missing out on great but avoiding terrible."
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Re: Bonds are primarily for Safety--NOT higher Return

Post by abuss368 »

Taylor Larimore wrote: Tue Nov 26, 2019 9:44 am
Since vanguard introduced their Int bond fund, it has been leading TBM by about 1% cagr.
Bogleheads:

It is important to understand that bonds, CDs, cash, etc. are for Safety. Knowledgeable investors increase their stock allocation for Higher Return.

Nearly all the long-term return from bonds is from their yield. Almost without exception, bonds with the highest yields are the bond's with the highest risk of loss. It has been said "More money has been lost by investors seeking higher yield than has been lost at the point of a gun."

I chose Total Bond Market Index Fund for The Three-Fund Portfolio, not for it's yield, but primarily for its safety. Its worst annual loss since inception in 1986 was -2.66% (it gained +16% in 1987). TBM is now the largest bond fund in the world for good reasons.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Deep Down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio"
We invested in many bond funds over the years at Vanguard: Short Term, High Yield, GNMA, Intermediate Term Treasury, Intermediate Term Corporate, TIPS, and International Bonds.

After increasing our investment education we soon realized that one bond fund works to provide safety and income to a portfolio. The rest is in stocks.

We simplified the portfolio on the bond side over a decade ago with Total Bond Index. The fund does the job.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Bonds are primarily for Safety--NOT higher Return

Post by abuss368 »

Jack Bogle's Words of Wisdom: "Deep Down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio"
That quote has taught us so much!
John C. Bogle: “Simplicity is the master key to financial success."
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"What Should I Do Now?"

Post by Taylor Larimore »

abuss368 wrote: Tue Nov 26, 2019 7:26 pm
Jack Bogle's Words of Wisdom: "Deep Down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio"
That quote has taught us so much!
abuss368:

That quote from Jack's Little Book of Common Sense Investing is the first sentence in his last chapter titled, "What Should I do Now?" I wish I had followed his advice earlier.

I can't think of better advice for most investors than the quote above--especially investors (and many speculators) who are wasting their time and money trying to "beat the market" using some complex scheme promoted by the investment industry who are having difficulty making a profit (from our returns) using low-cost total market index funds.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: "What Should I Do Now?"

Post by abuss368 »

Taylor Larimore wrote: Tue Nov 26, 2019 7:48 pm
abuss368 wrote: Tue Nov 26, 2019 7:26 pm
Jack Bogle's Words of Wisdom: "Deep Down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock-market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio"
That quote has taught us so much!
abuss368:

That quote from Jack's Little Book of Common Sense Investing is the first sentence in his last chapter titled, "What Should I do Now?" I wish I had followed his advice earlier.

I can't think of better advice for most investors than the quote above--especially investors (and many speculators) who are wasting their time and money trying to "beat the market" using some complex scheme promoted by the investment industry who are having difficulty making a profit (from our returns) using low-cost total market index funds.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
Thanks Taylor! Mr. Bogle's excellent book "The Little Book of Common Sense Investing" is one of my favorites. Probably second to Mr. Bogle's other "Enough".
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Please keep the excellent thoughts and perspectives coming Bogleheads!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by yogesh »

Somehow I think Millennials will do better because:
- robo advisors tend to use low cost index funds
- brokerages emphasizing low cost/no fee etf/funds
- auto-investing is norm with lifestrategy/target-date
- more money moves from active to passive
- defaults in 401k change to target date index
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
S&P 500 Index is an excellent choice as well. My 401k has that at 0.04 expense ratio (no total stock available). I would simply use that before two equity funds.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
Mr. Bogle talked about that years ago when rates were lower. He also noted he invested in Total Bond. Either is probably fine but corporate bonds are riskier. Total Bond increased during the financial crisis.
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

abuss368 wrote: Wed Nov 27, 2019 11:42 pm
anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
S&P 500 Index is an excellent choice as well. My 401k has that at 0.04 expense ratio (no total stock available). I would simply use that before two equity funds.
Thank you abuss368 for the suggestion.

I am fortunate the S&P 500 index fund in my 401k and the completion index both only have 0.01% expense ratios. I know it adds a little complexity dealing with 2 funds (I had a post about it a while ago and received some great input from other forum members). I decided that actually approximating the total market with the 2 funds would result in me tinkering less, as it would mean I have the total market in my 401k and RIRA and I would not feel like I am missing out if/when the total market out performs the S&P 500 (not recently though!). It also helps that other forum members suggested some good re-balancing rules which I hope keeps me honest (contribute per pay check 80/20 S&P 500/completion index; re-balance only once a year if the ratio is outside 75/25 to 85/15 ranges. Despite the S&P 500 out performance of the total market this year, I have no felt the urge to move to only the S&P 500.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anon_investor wrote: Wed Nov 27, 2019 11:53 pm
abuss368 wrote: Wed Nov 27, 2019 11:42 pm
anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
S&P 500 Index is an excellent choice as well. My 401k has that at 0.04 expense ratio (no total stock available). I would simply use that before two equity funds.
Thank you abuss368 for the suggestion.

I am fortunate the S&P 500 index fund in my 401k and the completion index both only have 0.01% expense ratios. I know it adds a little complexity dealing with 2 funds (I had a post about it a while ago and received some great input from other forum members). I decided that actually approximating the total market with the 2 funds would result in me tinkering less, as it would mean I have the total market in my 401k and RIRA and I would not feel like I am missing out if/when the total market out performs the S&P 500 (not recently though!). It also helps that other forum members suggested some good re-balancing rules which I hope keeps me honest (contribute per pay check 80/20 S&P 500/completion index; re-balance only once a year if the ratio is outside 75/25 to 85/15 ranges. Despite the S&P 500 out performance of the total market this year, I have no felt the urge to move to only the S&P 500.
That is a good strategy. Essentially Jack’s Two Funds?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

abuss368 wrote: Wed Nov 27, 2019 11:42 pm
anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
Mr. Bogle talked about that years ago when rates were lower. He also noted he invested in Total Bond. Either is probably fine but corporate bonds are riskier. Total Bond increased during the financial crisis.
That makes sense. Interesting, since rates are again quite low. I think he also suggests in the book an intermediate muni bond fund like VWITX/VWIUX for individuals in high tax brackets that need to holds in their taxable accounts. It's interesting he talks about indexing in his book, but specifically says quasi indexed municipal bond funds, I wonder if it was a plug for Vanguard's muni bond funds, since no true indexed version existed until recently.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anon_investor wrote: Wed Nov 27, 2019 11:59 pm
abuss368 wrote: Wed Nov 27, 2019 11:42 pm
anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
Mr. Bogle talked about that years ago when rates were lower. He also noted he invested in Total Bond. Either is probably fine but corporate bonds are riskier. Total Bond increased during the financial crisis.
That makes sense. Interesting, since rates are again quite low. I think he also suggests in the book an intermediate muni bond fund like VWITX/VWIUX for individuals in high tax brackets that need to holds in their taxable accounts. It's interesting he talks about indexing in his book, but specifically says quasi indexed municipal bond funds, I wonder if it was a plug for Vanguard's muni bond funds, since no true indexed version existed until recently.
Mr. Bogle invested in intermediate term tax exempt. I have invested in this fund for years and it works. Good fund.
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

abuss368 wrote: Wed Nov 27, 2019 11:56 pm
anon_investor wrote: Wed Nov 27, 2019 11:53 pm
abuss368 wrote: Wed Nov 27, 2019 11:42 pm
anon_investor wrote: Wed Nov 27, 2019 11:34 pm I believe in Jack Bogle's two fund portfolio, but I do have some VGT on the side with my "play money" ~5% of the portfolio (although it's grown closer to 6/7% this year). I love the simplicity, unfortunately I need to hold 2 funds in my 401k to replicate the total market. I know, I know, I could have just held the S&P500 index fund in my 401k and skip the completion index, but I figured why not since the expense ratio was the same (usually not the case).

I hold a total bond index fund and I am fine with it, but after reading The Little Book of Common Sense Investing, is it me or does Bogle say he prefers an intermediate bond index fund (like Vanguard's) which is closer to 50/50 corporate/treasury bonds?
S&P 500 Index is an excellent choice as well. My 401k has that at 0.04 expense ratio (no total stock available). I would simply use that before two equity funds.
Thank you abuss368 for the suggestion.

I am fortunate the S&P 500 index fund in my 401k and the completion index both only have 0.01% expense ratios. I know it adds a little complexity dealing with 2 funds (I had a post about it a while ago and received some great input from other forum members). I decided that actually approximating the total market with the 2 funds would result in me tinkering less, as it would mean I have the total market in my 401k and RIRA and I would not feel like I am missing out if/when the total market out performs the S&P 500 (not recently though!). It also helps that other forum members suggested some good re-balancing rules which I hope keeps me honest (contribute per pay check 80/20 S&P 500/completion index; re-balance only once a year if the ratio is outside 75/25 to 85/15 ranges. Despite the S&P 500 out performance of the total market this year, I have no felt the urge to move to only the S&P 500.
That is a good strategy. Essentially Jack’s Two Funds?
:sharebeer Haha I guess it is, since he created the extended market fund before the total market fund, to let S&P 500 fund owners hold the total market.
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Re: Jack Bogle - Two Fund Portfolio

Post by anthonyphamy »

Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anthonyphamy wrote: Thu Nov 28, 2019 12:30 am Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
Excellent. Hopefully Taylor will see your note.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anthonyphamy wrote: Thu Nov 28, 2019 12:30 am Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
Are you by chance retired?
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by anthonyphamy »

abuss368 wrote: Thu Nov 28, 2019 11:10 am
anthonyphamy wrote: Thu Nov 28, 2019 12:30 am Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
Are you by chance retired?
I am not retired. I still have about 30 years more of work. Why do you ask?
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anthonyphamy wrote: Thu Nov 28, 2019 12:12 pm
abuss368 wrote: Thu Nov 28, 2019 11:10 am
anthonyphamy wrote: Thu Nov 28, 2019 12:30 am Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
Are you by chance retired?
I am not retired. I still have about 30 years more of work. Why do you ask?
Always curious! I recently pulled out "The Bogleheads Guide to Investing" and the pages that start with Total Stock only, then Total Bond, add a few more funds, and only to simplify to Jack Bogle's Two Fund Portfolio at retirement speak to me.

Keep investing simple.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Jack Bogle - Two Fund Portfolio

Post by anthonyphamy »

abuss368 wrote: Thu Nov 28, 2019 12:20 pm
anthonyphamy wrote: Thu Nov 28, 2019 12:12 pm
abuss368 wrote: Thu Nov 28, 2019 11:10 am
anthonyphamy wrote: Thu Nov 28, 2019 12:30 am Thank you to Taylor Lairmore for introducing me to the 3 fund portfolio 3 years ago, and thank you abuss368 for starting this great thread.

I consolidated 4 funds (total stock, total international stock, total bond, VPMAX) to 2 funds (total stock, total bond) with 90/10% AA.

I very much like the simplicity.
Are you by chance retired?
I am not retired. I still have about 30 years more of work. Why do you ask?
Always curious! I recently pulled out "The Bogleheads Guide to Investing" and the pages that start with Total Stock only, then Total Bond, add a few more funds, and only to simplify to Jack Bogle's Two Fund Portfolio at retirement speak to me.

Keep investing simple.
Simplicity brings peace of mind.

I do have cash spread between Marcus, Ally, VMFXX, and VMMX. I'm thinking about consolidating it too to help for simplicity.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

anthonyphamy wrote: Thu Nov 28, 2019 1:12 pm
Simplicity brings peace of mind.

I do have cash spread between Marcus, Ally, VMFXX, and VMMX. I'm thinking about consolidating it too to help for simplicity.
We consolidated our cash to one simple checking account and one prime money market fund at Vanguard. Very simple, a lot less transactions and transfers, and much less to manage.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Bogleheads -

The Two Fund Portfolio page of the wiki has been added:

https://www.bogleheads.org/wiki/Two-fund_portfolio
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Re: Jack Bogle - Two Fund Portfolio

Post by RJC »

abuss368 wrote: Sat Nov 30, 2019 11:31 am Bogleheads -

The Two Fund Portfolio page of the wiki has been added:

https://www.bogleheads.org/wiki/Two-fund_portfolio
Excellent! :beer
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

RJC wrote: Sat Nov 30, 2019 1:45 pm
abuss368 wrote: Sat Nov 30, 2019 11:31 am Bogleheads -

The Two Fund Portfolio page of the wiki has been added:

https://www.bogleheads.org/wiki/Two-fund_portfolio
Excellent! :beer
Hi RJC -

Do you invest in a simple Two Fund Portfolio?
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

My understanding is over the long term it should not make much difference between a US only portfolio compared to a US & International portfolio.

Then I read some of the statistics earlier going back over 100 years!

Perhaps the outperformance of the US may not continue and will evolve to the US and International returns being close.

Why then, assuming the returns of both US & International may be close moving forward (and that is a "may be"), would one want to include international when considering the additional risk should result in additional reward? I feel as if for all the additional risk assumed that I am never compensated in the form of additional return.

It appears as if the reward never shows up!
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Re: Jack Bogle - Two Fund Portfolio

Post by longinvest »

abuss368 wrote: Sat Nov 30, 2019 2:41 pm My understanding is over the long term it should not make much difference between a US only portfolio compared to a US & International portfolio.

Then I read some of the statistics earlier going back over 100 years!

Perhaps the outperformance of the US may not continue and will evolve to the US and International returns being close.

Why then, assuming the returns of both US & International may be close moving forward (and that is a "may be"), would one want to include international when considering the additional risk should result in additional reward? I feel as if for all the additional risk assumed that I am never compensated in the form of additional return.

It appears as if the reward never shows up!
(I added the red emphasis in the quoted post.)

Dear Abuss368,

Don't you think that a portfolio concentrated into the stock and bond securities of a single winning country, the US, could deliver a significant reward for its concentration risk?

The thing is this: taking risk can result into great rewards, but it can also result into steep penalties, as Japanese domestic-only stock investors have learned over the last three decades.

Investing into a diversified portfolio which includes both domestic and international securities (possibly with a moderate home bias) will always underperform the higher performing market. A diversified portfolio is never the best performing one.

Choosing investments based on emotions is very dangerous to one's wealth; it can easily lead to investing into the best performing assets of the past. You've been a member of this forum since 2009 and you've written over 15,000 posts. I think that you know that this wouldn't be a good approach to investing.

The goal of Bogleheads investing isn't to win; it's to not lose. Broadly diversifying one's investments leads to boring average returns. But, that's exactly what Bogleheads are looking for: reliably getting average returns, guaranteeing that they'll never be losers!

Best regards,

longinvest

P.S. This is a copy of the reply I made to your identical post on another thread.
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Re: Jack Bogle - Two Fund Portfolio

Post by RJC »

abuss368 wrote: Sat Nov 30, 2019 2:12 pm
RJC wrote: Sat Nov 30, 2019 1:45 pm
abuss368 wrote: Sat Nov 30, 2019 11:31 am Bogleheads -

The Two Fund Portfolio page of the wiki has been added:

https://www.bogleheads.org/wiki/Two-fund_portfolio
Excellent! :beer
Hi RJC -

Do you invest in a simple Two Fund Portfolio?
More like a one-fund portfolio - VTSAX and a sizable EF (in a savings account). It's worked well for us.
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Re: Jack Bogle - Two Fund Portfolio

Post by BalancedJCB19 »

I used to know someone who loved the balanced index fund and had their entire net worth in it. They did very well and never had to fuss with it.
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