Jack Bogle - Two Fund Portfolio

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Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Marseille07 wrote: Wed May 26, 2021 7:53 pm
Triple digit golfer wrote: Wed May 26, 2021 7:40 pm Why? When I had $900k before I was $720/180. What changed?
Nothing changed, it's really a matter of preserving equities when you can. This is not to say 720/180 is a terrible idea, but less desirable than 800/100 imo.
I don't preserve equities. I maintain an AA. If the goal was as much equities as possible, I wouldn't hold any bonds in the first place. How could 800/100, an 89/11 AA, be more desirable than 80/20 for someone who literally desires 80/20?
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Triple digit golfer wrote: Wed May 26, 2021 7:58 pm
Marseille07 wrote: Wed May 26, 2021 7:53 pm
Triple digit golfer wrote: Wed May 26, 2021 7:40 pm Why? When I had $900k before I was $720/180. What changed?
Nothing changed, it's really a matter of preserving equities when you can. This is not to say 720/180 is a terrible idea, but less desirable than 800/100 imo.
I don't preserve equities. I maintain an AA. If the goal was as much equities as possible, I wouldn't hold any bonds in the first place. How could 800/100, an 89/11 AA, be more desirable than 80/20 for someone who literally desires 80/20?
It's a temporary situation though. You will be replenishing fixed income gradually over time is the key here. I'm not suggesting 89/11 will be your new AA.
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Marseille07 wrote: Wed May 26, 2021 7:59 pm
Triple digit golfer wrote: Wed May 26, 2021 7:58 pm
Marseille07 wrote: Wed May 26, 2021 7:53 pm
Triple digit golfer wrote: Wed May 26, 2021 7:40 pm Why? When I had $900k before I was $720/180. What changed?
Nothing changed, it's really a matter of preserving equities when you can. This is not to say 720/180 is a terrible idea, but less desirable than 800/100 imo.
I don't preserve equities. I maintain an AA. If the goal was as much equities as possible, I wouldn't hold any bonds in the first place. How could 800/100, an 89/11 AA, be more desirable than 80/20 for someone who literally desires 80/20?
It's a temporary situation though. You will be replenishing fixed income gradually over time is the key here. I'm not suggesting 89/11 will be your new AA.
I don’t see the point. When my portfolio was $500k, 600k, 1 million 80/20 was desirable. Why then, when it goes from 1 million back to 900k would it not be?

If I'm 800/200 and then markets fall and now I'm at 900k, should I go to 800/100? Of course not. Makes no sense.
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Triple digit golfer wrote: Wed May 26, 2021 8:05 pm I don’t see the point. When my portfolio was $500k, 600k, 1 million 80/20 was desirable. Why then, when it goes from 1 million back to 900k would it not be?

If I'm 800/200 and then markets fall and now I'm at 900k, should I go to 800/100? Of course not. Makes no sense.
To each their own then. I'm a nudger, I try not to rebalance bigly when I don't have to.
bgf
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Re: Jack Bogle - Two Fund Portfolio

Post by bgf »

Marseille07 wrote: Wed May 26, 2021 8:57 pm
Triple digit golfer wrote: Wed May 26, 2021 8:05 pm I don’t see the point. When my portfolio was $500k, 600k, 1 million 80/20 was desirable. Why then, when it goes from 1 million back to 900k would it not be?

If I'm 800/200 and then markets fall and now I'm at 900k, should I go to 800/100? Of course not. Makes no sense.
To each their own then. I'm a nudger, I try not to rebalance bigly when I don't have to.
When do you have to?
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Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

bgf wrote: Wed May 26, 2021 9:10 pm
Marseille07 wrote: Wed May 26, 2021 8:57 pm
Triple digit golfer wrote: Wed May 26, 2021 8:05 pm I don’t see the point. When my portfolio was $500k, 600k, 1 million 80/20 was desirable. Why then, when it goes from 1 million back to 900k would it not be?

If I'm 800/200 and then markets fall and now I'm at 900k, should I go to 800/100? Of course not. Makes no sense.
To each their own then. I'm a nudger, I try not to rebalance bigly when I don't have to.
When do you have to?
I can't think of any. 200K is a lot of fixed income to deal with emergencies.
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Marseille07 wrote: Wed May 26, 2021 9:15 pm
bgf wrote: Wed May 26, 2021 9:10 pm
Marseille07 wrote: Wed May 26, 2021 8:57 pm
Triple digit golfer wrote: Wed May 26, 2021 8:05 pm I don’t see the point. When my portfolio was $500k, 600k, 1 million 80/20 was desirable. Why then, when it goes from 1 million back to 900k would it not be?

If I'm 800/200 and then markets fall and now I'm at 900k, should I go to 800/100? Of course not. Makes no sense.
To each their own then. I'm a nudger, I try not to rebalance bigly when I don't have to.
When do you have to?
I can't think of any. 200K is a lot of fixed income to deal with emergencies.
Do you add to your fixed income or keep the $ amount static?
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

anon_investor wrote: Wed May 26, 2021 9:30 pm Do you add to your fixed income or keep the $ amount static?
The way I operate is to keep a % of AA. If my AA is 2M, I might have 60K (3%) EF for example. I find it easier to calculate it this way than turning 2M into 97/3.
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Marseille07 wrote: Wed May 26, 2021 9:34 pm
anon_investor wrote: Wed May 26, 2021 9:30 pm Do you add to your fixed income or keep the $ amount static?
The way I operate is to keep a % of AA. If my AA is 2M, I might have 60K (3%) EF for example. I find it easier to calculate it this way than turning 2M into 97/3.
But you just said you wouldn't keep the percentage steady.
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Triple digit golfer wrote: Wed May 26, 2021 9:41 pm
Marseille07 wrote: Wed May 26, 2021 9:34 pm
anon_investor wrote: Wed May 26, 2021 9:30 pm Do you add to your fixed income or keep the $ amount static?
The way I operate is to keep a % of AA. If my AA is 2M, I might have 60K (3%) EF for example. I find it easier to calculate it this way than turning 2M into 97/3.
But you just said you wouldn't keep the percentage steady.
I said temporarily...the idea is to replenish over time once fixed income is spent down.
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Marseille07 wrote: Wed May 26, 2021 9:42 pm
Triple digit golfer wrote: Wed May 26, 2021 9:41 pm
Marseille07 wrote: Wed May 26, 2021 9:34 pm
anon_investor wrote: Wed May 26, 2021 9:30 pm Do you add to your fixed income or keep the $ amount static?
The way I operate is to keep a % of AA. If my AA is 2M, I might have 60K (3%) EF for example. I find it easier to calculate it this way than turning 2M into 97/3.
But you just said you wouldn't keep the percentage steady.
I said temporarily...the idea is to replenish over time once fixed income is spent down.
Whatever works for you.
LunarOpal
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Re: Jack Bogle - Two Fund Portfolio

Post by LunarOpal »

Nathan Drake wrote: Wed May 26, 2021 12:24 pm
LunarOpal wrote: Wed May 26, 2021 11:38 am
Nathan Drake wrote: Wed May 26, 2021 11:22 am
Marseille07 wrote: Wed May 26, 2021 10:38 am As far as I can tell, no one's trying to convert others to go 100% US. We just explain why we do what we do. As I said, this is kind of like betting on the favorite, the underdog, or a mixture of both.
There are countless examples of people in this thread using recent past performance to dissuade others from investing globally.

What was the purpose of Taylor bringing up 14% vs 10% annualized returns this past decade?

Feel free to justify 100% US for yourself, but realize that it goes against the conventional wisdom of all financial planning, and is rooted in a flawed investment strategy that could do harm to one’s ability to meet their financial goals.
I can’t speak for Taylor, but I can say (and often do say) that US has out-performed ex-US in the past 10 years, the past 20 year, the past 30 years, the past 40 years, and the past 50 years. That’s not “recent”.

The “conventional wisdom” argument is just an argument from authority. It’s not based on data; to the extent it’s based on anything, it’s based on a narrative. A nice story unsupported by data (or, worse, supported by deliberately misleading data). The idea that people must hold an international component is a fairly recent fad development as well.

The idea that not having an international component “could” harm one’s ability to meet financial goals is just scare-mongering. *Having* an international component is just as likely to harm one’s ability to meet financial goals.

But, realistically? People will meet their financial goals either way; the markets are so correlated that there won’t be much of a difference.

The internet has a tendency to make everyone want to be absolutist and extremist; reality is different.
This is false. There is plenty of data to support that having more geographical diversification both increases returns and reduces risk. It’s literally one of the only free lunches in investing.

And the US has not outperformed over every time period. You are extrapolating decades with a recent end date already in mind. Adjust both the starting dates and ending dates which reveals a completely different set of outcomes.

And it is completely unknowable whether you will be able to meet your needs with a 100% US only portfolio. This suggests a false level of confidence. There are risks, however low, that any region could suffer a very prolonged period of poor returns. US is not exempt.

Having more diversification leads to a better assurance of meeting financial goals; not less - it’s a completely different topic than “well, my investment returned more, therefore my strategy was clearly better”.
1. There is *not* data to support having more geographical diversification increases returns and reduces risk. The data shows that something like a 60/40 US/ex-US portfolios *decreases* performance and has little effect on risk. US and ex-US equities are *all* highly correlated equities; ex-US fell farther than US in 2008, despite the GFC beginning in the US (it only fell about 10% farther, but still).


2. It's true that there are time periods where ex-US has outperformed. What you are ignoring is that the ex-US outperformance was much *smaller* than US outperformance. Gains are based on total returns, not on winning a particular decade. ex-US out-performance by 5% in one decade followed by US outperformance of 30% in another decade followed by ex-US performance of 3% in the next decade, capped by US out-performance of 45% in the next decade doesn't mean that there's a tie because each outperformed in two 10 year periods.

3. "And it is completely unknowable whether you will be able to meet your needs with a 100% US only portfolio."

This is a strange statement.

The future is completely unknowable. Me meeting my goals with a 100% US portfolio is no more or less knowable than you meeting your goals with a 60/40 US/ex-US portfolio. They are unknowable to the exact same degree.

4. "This suggests a false level of confidence."

Because you can predict the future? Just stick to your beliefs and stop insulting people who have reached different conclusions based facts.

5. "There are risks, however low, that any region could suffer a very prolonged period of poor returns. US is not exempt."

Sure. There are also real risks, perhaps not so low, that ex-US will continue to underperform because many ex-US markets are not focused on increasing shareholder returns the way that the US and a few other markets are.
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Triple digit golfer wrote: Wed May 26, 2021 9:44 pm Whatever works for you.
I know the math works, but I admit I sometimes wonder if 3% in EF is enough. This is essentially 1 year of EF assuming 3% WR. Normal years are fine, but if we run into another 2000~2008 then it might be rough.
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Marseille07 wrote: Wed May 26, 2021 9:34 pm
anon_investor wrote: Wed May 26, 2021 9:30 pm Do you add to your fixed income or keep the $ amount static?
The way I operate is to keep a % of AA. If my AA is 2M, I might have 60K (3%) EF for example. I find it easier to calculate it this way than turning 2M into 97/3.
Ah okay, my EF stays a certain minimim number of months of expenses.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

LunarOpal wrote: Wed May 26, 2021 10:21 pm
Nathan Drake wrote: Wed May 26, 2021 12:24 pm
LunarOpal wrote: Wed May 26, 2021 11:38 am
Nathan Drake wrote: Wed May 26, 2021 11:22 am
Marseille07 wrote: Wed May 26, 2021 10:38 am As far as I can tell, no one's trying to convert others to go 100% US. We just explain why we do what we do. As I said, this is kind of like betting on the favorite, the underdog, or a mixture of both.
There are countless examples of people in this thread using recent past performance to dissuade others from investing globally.

What was the purpose of Taylor bringing up 14% vs 10% annualized returns this past decade?

Feel free to justify 100% US for yourself, but realize that it goes against the conventional wisdom of all financial planning, and is rooted in a flawed investment strategy that could do harm to one’s ability to meet their financial goals.
I can’t speak for Taylor, but I can say (and often do say) that US has out-performed ex-US in the past 10 years, the past 20 year, the past 30 years, the past 40 years, and the past 50 years. That’s not “recent”.

The “conventional wisdom” argument is just an argument from authority. It’s not based on data; to the extent it’s based on anything, it’s based on a narrative. A nice story unsupported by data (or, worse, supported by deliberately misleading data). The idea that people must hold an international component is a fairly recent fad development as well.

The idea that not having an international component “could” harm one’s ability to meet financial goals is just scare-mongering. *Having* an international component is just as likely to harm one’s ability to meet financial goals.

But, realistically? People will meet their financial goals either way; the markets are so correlated that there won’t be much of a difference.

The internet has a tendency to make everyone want to be absolutist and extremist; reality is different.
This is false. There is plenty of data to support that having more geographical diversification both increases returns and reduces risk. It’s literally one of the only free lunches in investing.

And the US has not outperformed over every time period. You are extrapolating decades with a recent end date already in mind. Adjust both the starting dates and ending dates which reveals a completely different set of outcomes.

And it is completely unknowable whether you will be able to meet your needs with a 100% US only portfolio. This suggests a false level of confidence. There are risks, however low, that any region could suffer a very prolonged period of poor returns. US is not exempt.

Having more diversification leads to a better assurance of meeting financial goals; not less - it’s a completely different topic than “well, my investment returned more, therefore my strategy was clearly better”.
1. There is *not* data to support having more geographical diversification increases returns and reduces risk. The data shows that something like a 60/40 US/ex-US portfolios *decreases* performance and has little effect on risk. US and ex-US equities are *all* highly correlated equities; ex-US fell farther than US in 2008, despite the GFC beginning in the US (it only fell about 10% farther, but still).


2. It's true that there are time periods where ex-US has outperformed. What you are ignoring is that the ex-US outperformance was much *smaller* than US outperformance. Gains are based on total returns, not on winning a particular decade. ex-US out-performance by 5% in one decade followed by US outperformance of 30% in another decade followed by ex-US performance of 3% in the next decade, capped by US out-performance of 45% in the next decade doesn't mean that there's a tie because each outperformed in two 10 year periods.

3. "And it is completely unknowable whether you will be able to meet your needs with a 100% US only portfolio."

This is a strange statement.

The future is completely unknowable. Me meeting my goals with a 100% US portfolio is no more or less knowable than you meeting your goals with a 60/40 US/ex-US portfolio. They are unknowable to the exact same degree.

4. "This suggests a false level of confidence."

Because you can predict the future? Just stick to your beliefs and stop insulting people who have reached different conclusions based facts.

5. "There are risks, however low, that any region could suffer a very prolonged period of poor returns. US is not exempt."

Sure. There are also real risks, perhaps not so low, that ex-US will continue to underperform because many ex-US markets are not focused on increasing shareholder returns the way that the US and a few other markets are.
1. No, see: vanguard study on diversification

2. No, exUS was significantly greater during 60s through 80s

3. No, if the US has some sort of Japanese style market meltdown, and bonds provide zero return, you will need to save significantly more (wait significantly longer) to meet retirement goals. Very unlikely a globally diversified portfolio has the same fate as the climate of a single country.

4. See point 3. There’s no insulting going on.

5. ExUS continuing to underperform at some level is possible. Having both exUS and US will allow you to reach your goals in this scenario, since a diversified strategy is not contingent on any single country out performing. And it also allows you to prevent single country risk of a very steep and prolonged downturn.
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Alchemist
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Re: Jack Bogle - Two Fund Portfolio

Post by Alchemist »

I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused

I can sorta understand the argument based on valuations that some folks give as a forward looking argument in favor of adding international stocks; but the historical argument is pretty terrible. There have been some times that international did quite well, but over the 25 years of actual history we have with actual investable mutual funds it was quite bad.

Importantly I'm not saying US just did better. Rather I am saying on an objective basis, as an equity investment; Vanguard's Total International Index fund (VGTSX) did poorly. It returned a mere 5.32% while the U.S. market delivered a historically normal 9.76%. VGTSX did this while providing steeper drawdowns and higher levels of volatility.

In fact since 1996, when VGTSX became available for real investors; a 60/40 US Stock/Bond portfolio outperformed a 60/40 US/Int 100% stock portfolio.

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Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Alchemist wrote: Thu May 27, 2021 6:36 am I can sorta understand the argument based on valuations that some folks give as a forward looking argument in favor of adding international stocks
Therein lies the logic problem. I didn't add international stocks to my U.S. stock portfolio. I built a portfolio of stocks from all sectors, styles, sizes, and countries.

Most people have no problem with the U.S. total market and say it's neutral relative to sectors, styles, and sizes. Why, then, are they so adamant about not being neutral relative to countries?

The U.S. market is only neutral to sectors, styles, and sizes when you disregard that there are other countries with different weightings of each of those.

The international proponents in this thread are trying to give a fair shake to new investors who come to the forum and prevent them from thinking that a 100% U.S. equity portfolio is somehow the default, neutral equity portfolio. It is not. Vanguard says it as well.
Da5id
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Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

Alchemist wrote: Thu May 27, 2021 6:36 am Importantly I'm not saying US just did better. Rather I am saying on an objective basis, as an equity investment; Vanguard's Total International Index fund (VGTSX) did poorly. It returned a mere 5.32% while the U.S. market delivered a historically normal 9.76%. VGTSX did this while providing steeper drawdowns and higher levels of volatility.

In fact since 1996, when VGTSX became available for real investors; a 60/40 US Stock/Bond portfolio outperformed a 60/40 US/Int 100% stock portfolio.
Endpoints and start dates matter so much. If one starts in 1997 (oldest year for both VTSMX and VGTSX) US has been ahead or close the whole period. If one starts 20 years ago they were tied the first 4 years and then International was ahead, sometimes markedly, until about 2013. At the current point of significant recent US outperformance it is easy to believe it will go on forever, that is how peoples minds are wired to work.

However unlike you, I don't believe that I know the future relative returns of US and Int'l. Maybe you are right, the US will outperform forever. In fact, maybe that will go on until US market cap asymptotically approaches 100% of world market cap (isn't that the logical result of permanent outperformance?). Maybe US valuations will continue to rise because everyone recognizes that inevitable future, that things have changed forever and that the rough historical parity of US and international stock returns is just a thing of the past. That is I suppose indeed possible, and if so I'll do well. Because I invest in US stocks. Maybe that won't be the case and the US will underperform Int'l. I'll be OK there too. That is why I prefer to invest in both, I'll be OK either way.
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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog »

Alchemist wrote: Thu May 27, 2021 6:36 am
I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused

We're trying to protect novice investors by having them see both sides of the argument.

The religious zealotry points back to this thread.
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Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Alchemist wrote: Thu May 27, 2021 6:36 am I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused
The international proponents aren't just going for ex-US; they still want US exposure. In this sense, they're more like world-cap proponents. And if they're world-cap proponents, their equities AA would have to be world market weight more or less (can't be 99/1 or something lopsided).

Thus lots of people end up advocating for the same portfolio choices they do.
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Marseille07 wrote: Thu May 27, 2021 10:03 am
Alchemist wrote: Thu May 27, 2021 6:36 am I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused
The international proponents aren't just going for ex-US; they still want US exposure. In this sense, they're more like world-cap proponents. And if they're world-cap proponents, their equities AA would have to be world market weight more or less (can't be 99/1 or something lopsided).

Thus lots of people end up advocating for the same portfolio choices they do.
For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
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Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

Alchemist wrote: Thu May 27, 2021 6:36 am I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused
Given that the genesis of this thread (and the extensive pointers to the thread by OP elsewhere) are based on advocacy towards making the same portfolio choices he did/does, why would you be confused if others respond in the same vein? While I disagree with his POV, there is nothing wrong with advocating for your beliefs.

US vs Int'l is clearly a secondary decision to percentage of equities (of whatever national origin) in your portfolio. So you might be right that the level of heat is not justified. And, oddly enough, here you are advocating for a position...
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

anon_investor wrote: Thu May 27, 2021 10:27 am For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
That's an interesting take. I don't think I've seen a poster who advocates for heavy US holdings with very little ex-US. A lot of them do call for world market cap weighted though.
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Marseille07 wrote: Thu May 27, 2021 10:35 am
anon_investor wrote: Thu May 27, 2021 10:27 am For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
That's an interesting take. I don't think I've seen a poster who advocates for heavy US holdings with very little ex-US. A lot of them do call for world market cap weighted though.
I think I a lot of people use 80/20, I believe that the was original BH recommendation and what Vanguard's recommendation was at some point.
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

anon_investor wrote: Thu May 27, 2021 10:53 am
Marseille07 wrote: Thu May 27, 2021 10:35 am
anon_investor wrote: Thu May 27, 2021 10:27 am For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
That's an interesting take. I don't think I've seen a poster who advocates for heavy US holdings with very little ex-US. A lot of them do call for world market cap weighted though.
I think I a lot of people use 80/20, I believe that the was original BH recommendation and what Vanguard's recommendation was at some point.
Yes, I think Mr. Bogle said "up to 20%" or something along those lines. 80/20 sounds reasonable to me.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Marseille07 wrote: Thu May 27, 2021 10:35 am
anon_investor wrote: Thu May 27, 2021 10:27 am For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
That's an interesting take. I don't think I've seen a poster who advocates for heavy US holdings with very little ex-US. A lot of them do call for world market cap weighted though.
What? That’s the whole point of this two fund approach
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Da5id
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Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

Nathan Drake wrote: Thu May 27, 2021 12:51 pm
Marseille07 wrote: Thu May 27, 2021 10:35 am
anon_investor wrote: Thu May 27, 2021 10:27 am For a US domiciled investor, having your equity allocation of US/Interational anywhere from 100/0 to world market cap weighted (currently - as of 4/30/2021: 57.7/42.3) is reasonable. We can all argue what is optimal from a diversification standpoint, but we will not know until the future what was optimal from an investment standpoint.
That's an interesting take. I don't think I've seen a poster who advocates for heavy US holdings with very little ex-US. A lot of them do call for world market cap weighted though.
What? That’s the whole point of this two fund approach
Only if "very little ex-US" is 0 :)
Alchemist
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Re: Jack Bogle - Two Fund Portfolio

Post by Alchemist »

Triple digit golfer wrote: Thu May 27, 2021 7:24 amMost people have no problem with the U.S. total market and say it's neutral relative to sectors, styles, and sizes. Why, then, are they so adamant about not being neutral relative to countries?

The U.S. market is only neutral to sectors, styles, and sizes when you disregard that there are other countries with different weightings of each of those.
This is the fundamental question at the bottom of this US-only vs Global Weight stock issue.

Do you believe the U.S. is "just another country" or do you believe it has unique attributes and/or advantages that make it a lower risk market to invest in?

Those of us who view the U.S. as unique among other nation-states will see international equity investing as an unnecessary additional risk. For Bogleheads who think it deserves no special consideration and believe it should be viewed the same as Sweden, Japan, Germany, or New Zealand will find the idea of U.S.-only investing as taking an unnecessary risk that can be diversified away with international equities.

Everything else that gets discussed (currency, valuations, etc) is superfluous to this central question.
lostdog wrote: Thu May 27, 2021 9:30 am We're trying to protect novice investors by having them see both sides of the argument.
Such "protection" for the entire history of the Bogleheads forum (and the Diehards before it) would only have delivered greater risks and lower returns. I am certainly glad that when I was a novice investor just starting out 12 years ago that I did not receive such "protection" when I decided to keep my equity investing to US TSM.

Investors are adults. They need no protection but they do benefit from various viewpoints so they can make up their own minds.
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Alchemist wrote: Fri May 28, 2021 2:22 amInvestors are adults. They need no protection but they do benefit from various viewpoints so they can make up their own minds.
Yep.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Alchemist wrote: Fri May 28, 2021 2:22 am
Triple digit golfer wrote: Thu May 27, 2021 7:24 amMost people have no problem with the U.S. total market and say it's neutral relative to sectors, styles, and sizes. Why, then, are they so adamant about not being neutral relative to countries?

The U.S. market is only neutral to sectors, styles, and sizes when you disregard that there are other countries with different weightings of each of those.
This is the fundamental question at the bottom of this US-only vs Global Weight stock issue.

Do you believe the U.S. is "just another country" or do you believe it has unique attributes and/or advantages that make it a lower risk market to invest in?

Those of us who view the U.S. as unique among other nation-states will see international equity investing as an unnecessary additional risk. For Bogleheads who think it deserves no special consideration and believe it should be viewed the same as Sweden, Japan, Germany, or New Zealand will find the idea of U.S.-only investing as taking an unnecessary risk that can be diversified away with international equities.

Everything else that gets discussed (currency, valuations, etc) is superfluous to this central question.
lostdog wrote: Thu May 27, 2021 9:30 am We're trying to protect novice investors by having them see both sides of the argument.
Such "protection" for the entire history of the Bogleheads forum (and the Diehards before it) would only have delivered greater risks and lower returns. I am certainly glad that when I was a novice investor just starting out 12 years ago that I did not receive such "protection" when I decided to keep my equity investing to US TSM.

Investors are adults. They need no protection but they do benefit from various viewpoints so they can make up their own minds.
I believe that US advantages have been more than priced in. I also believe that the risks of the US haven’t been adequately priced in. A total stock market heavily concentrated in large tech. Sky high debt levels starting to exceed worst parts of Eurozone. Demographics that are worse than emerging markets. I don’t believe US is less risky than most developed nations. If it was, then returns would adjust to less than exUS to account for these risks

ExUS is a collection of so many different countries. Some will not do so well. Just like not all US stocks go well. Some will have better advantages (demographically or otherwise), than the US. Some may look like bad countries, but their valuations are so low that an upside surprise means that returns are superior.

In terms of diversification, I see a stronger argument to be 100% exUS rather than 100% US

But since I don’t pretend to be a fortune teller and care more about downside protection than the best possible returns, I will hold both at roughly market weight.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Northern Flicker
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Re: Jack Bogle - Two Fund Portfolio

Post by Northern Flicker »

abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
User avatar
anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He's probably enjoying a nice vacation with all that extra money from US out performance over international. :twisted:
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

anon_investor wrote: Sat May 29, 2021 8:23 pm
Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He's probably enjoying a nice vacation with all that extra money from US out performance over international. :twisted:
But only recently.
Ferdinand2014
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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 »

Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He did not stop posting by choice. He is currently not able to defend his position on these topics accordingly.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
User avatar
anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Triple digit golfer wrote: Sat May 29, 2021 8:46 pm
anon_investor wrote: Sat May 29, 2021 8:23 pm
Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He's probably enjoying a nice vacation with all that extra money from US out performance over international. :twisted:
But only recently.
Depends what your definition of recent is. :sharebeer
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Ferdinand2014 wrote: Sat May 29, 2021 8:54 pm
Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He did not stop posting by choice. He is currently not able to defend his position on these topics accordingly.
I don't understand. Is he physically unable to post? On a ban or suspension?
User avatar
anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Triple digit golfer wrote: Sat May 29, 2021 9:02 pm
Ferdinand2014 wrote: Sat May 29, 2021 8:54 pm
Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm
abuss368 wrote: Sun May 16, 2021 1:50 pm Bogleheads -

An excellent article by our mentor John C. Bogle: “Why you don’t need international stocks; Why to hire an Advisor”

https://www.mymoneyblog.com/bogle-interview.html

Enjoy!
Tony
Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He did not stop posting by choice. He is currently not able to defend his position on these topics accordingly.
I don't understand. Is he physically unable to post? On a ban or suspension?
Yikes, I hope it's not the former...
Ferdinand2014
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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 »

anon_investor wrote: Sat May 29, 2021 9:02 pm
Triple digit golfer wrote: Sat May 29, 2021 9:02 pm
Ferdinand2014 wrote: Sat May 29, 2021 8:54 pm
Triple digit golfer wrote: Sat May 29, 2021 8:13 pm
Northern Flicker wrote: Sat May 29, 2021 8:04 pm

Tony,

I'm struggling to rationalize your position in the present thread with your position from postings in the following thread:

viewtopic.php?p=4827793#p4827793

viewtopic.php?p=4877691#p4877691

viewtopic.php?p=5804850#p5804850

What exactly are you proposing that we should be doing?
He got to 25k and stopped posting.
He did not stop posting by choice. He is currently not able to defend his position on these topics accordingly.
I don't understand. Is he physically unable to post? On a ban or suspension?
Yikes, I hope it's not the former...
Banned/Suspension or whatever the forum calls it for a length of time. I am not sure of the rules on this forum nor his thoughts regarding giving any more information beyond that so I won't.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Looks like the OP dropped international around Nov 2019. Didn't Mr. Bogle say "up to 20%" for international? Seems like a fine move, criticism isn't warranted in my opinion.
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

Marseille07 wrote: Sat May 29, 2021 9:10 pm Looks like the OP dropped international around Nov 2019. Didn't Mr. Bogle say "up to 20%" for international? Seems like a fine move, criticism isn't warranted in my opinion.
We've been through this this gazillion times. The criticism is due to him spamming the forum pushing his two fund portfolio.
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Triple digit golfer wrote: Sat May 29, 2021 9:20 pm
Marseille07 wrote: Sat May 29, 2021 9:10 pm Looks like the OP dropped international around Nov 2019. Didn't Mr. Bogle say "up to 20%" for international? Seems like a fine move, criticism isn't warranted in my opinion.
We've been through this this gazillion times. The criticism is due to him spamming the forum pushing his two fund portfolio.
Oh OK, I didn't notice he was doing that but I take your word for it.
helloeveryone
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Re: Jack Bogle - Two Fund Portfolio

Post by helloeveryone »

Marseille07 wrote: Tue May 25, 2021 11:15 pm
Da5id wrote: Tue May 25, 2021 11:09 pm
Marseille07 wrote: Tue May 25, 2021 10:54 pm
Nathan Drake wrote: Tue May 25, 2021 10:36 pm So....are we performance chasing?

When US underperforms does that mean somebody should have been 100% exUS?
We're all performance chasing to some degree. It's nonsensical to say US holders are performance chasing and ex-US holders aren't.
Why? In this thread many who are 100% US tout past performance and seem to think it will persist. Those who have some ex-US seem more focused on diversification. If they argued that ex-US were going to perform better than US and overweighted ex-US compared to global that would be performance chasing as I understand the phrase.
OK so please tell me this:

Investor A: 100/0, 100% US, 0% ex-US
Investor B: 0/100, 0% US, 100% ex-US

Is Investor A performance-chasing? How about Investor B? If your answer differs, where exactly is the difference coming from?
Random poster in this super long and seemingly controversial thread...

Investor A - performance chasing. Sleeps better at night with that decision
Investor B - performance chasing. Sleeps better at night with that decision

Investor A and Investor B - performing better than non BH investors as long as they stick to buy and hold and do all the other good things preached on this forum.

Investors who did not turn into Investor A or Investor B until later in the investing career - - wishes they had discovered low cost index investing when they first started investing.
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

helloeveryone wrote: Sat May 29, 2021 9:44 pm Random poster in this super long and seemingly controversial thread...

Investor A - performance chasing. Sleeps better at night with that decision
Investor B - performance chasing. Sleeps better at night with that decision

Investor A and Investor B - performing better than non BH investors as long as they stick to buy and hold and do all the other good things preached on this forum.

Investors who did not turn into Investor A or Investor B until later in the investing career - - wishes they had discovered low cost index investing when they first started investing.
Thanks for chiming in. I actually agree with your take, however those ex-US proponents turned out to be world market-cap weighted proponents. We later agreed that neither holding US-only long enough, nor holding world-cap weighted, is performance chasing.
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spdoublebass
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Re: Jack Bogle - Two Fund Portfolio

Post by spdoublebass »

helloeveryone wrote: Sat May 29, 2021 9:44 pm
Investor A and Investor B - performing better than non BH investors as long as they stick to buy and hold and do all the other good things preached on this forum.

This is why people get so touchy.
When you don’t stay the course and you jump ship, don’t start advising everyone else to follow you.

That is the only reason people get bent out of shape with this thread.
I'm trying to think, but nothing happens
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

spdoublebass wrote: Sat May 29, 2021 11:22 pm
helloeveryone wrote: Sat May 29, 2021 9:44 pm
Investor A and Investor B - performing better than non BH investors as long as they stick to buy and hold and do all the other good things preached on this forum.

This is why people get so touchy.
When you don’t stay the course and you jump ship, don’t start advising everyone else to follow you.

That is the only reason people get bent out of shape with this thread.
Not sure why people don't give Tony a break. He switched from a BH portfolio to another BH portfolio almost 2 years ago.
Personally I also switched from 90/10 to 100/0 six months ago. People make changes from time to time.
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spdoublebass
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Re: Jack Bogle - Two Fund Portfolio

Post by spdoublebass »

Marseille07 wrote: Sat May 29, 2021 11:26 pm
spdoublebass wrote: Sat May 29, 2021 11:22 pm
helloeveryone wrote: Sat May 29, 2021 9:44 pm
Investor A and Investor B - performing better than non BH investors as long as they stick to buy and hold and do all the other good things preached on this forum.

This is why people get so touchy.
When you don’t stay the course and you jump ship, don’t start advising everyone else to follow you.

That is the only reason people get bent out of shape with this thread.
Not sure why people don't give Tony a break. He switched from a BH portfolio to another BH portfolio almost 2 years ago.
Personally I also switched from 90/10 to 100/0 six months ago. People make changes from time to time.
This is not Facebook. These threads shouldn’t function as support group. This thread for example actually has good information in it if all of the bumping could just be removed.

When you bombard other threads about how great your new AA is, it becomes tiresome. Especially when you know it’s never been tested through a down period and you staying the course.
I'm trying to think, but nothing happens
Marseille07
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Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

I'm going to move closer to Warren Buffett's Two Fund Portfolio approach. Since my fixed income is cash, what I'll do is to count this cash portion as part of AA - basically, my AA is a combination of accounts holding equities and a checking account holding cash.

I think I found a solution to the rebalancing problem. As long as I rebalance slowly then it's fine; I should be able to avoid deep cuts on my AA.
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Marseille07 wrote: Sun May 30, 2021 12:33 am I'm going to move closer to Warren Buffett's Two Fund Portfolio approach. Since my fixed income is cash, what I'll do is to count this cash portion as part of AA - basically, my AA is a combination of accounts holding equities and a checking account holding cash.

I think I found a solution to the rebalancing problem. As long as I rebalance slowly then it's fine; I should be able to avoid deep cuts on my AA.
The Buffet widow portfolio is 90/10. Are you going to move towards that from 97/3? If you do and start hitting FDIC insurance limits, would you roll T-bills?
Triple digit golfer
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

anon_investor wrote: Sun May 30, 2021 6:48 am
Marseille07 wrote: Sun May 30, 2021 12:33 am I'm going to move closer to Warren Buffett's Two Fund Portfolio approach. Since my fixed income is cash, what I'll do is to count this cash portion as part of AA - basically, my AA is a combination of accounts holding equities and a checking account holding cash.

I think I found a solution to the rebalancing problem. As long as I rebalance slowly then it's fine; I should be able to avoid deep cuts on my AA.
The Buffet widow portfolio is 90/10. Are you going to move towards that from 97/3? If you do and start hitting FDIC insurance limits, would you roll T-bills?
Wow, a 10 figure EF for Buffett's wife! That would easily cover new tires on her Volvo and any leaky roof repairs in her old home.
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