Jack Bogle - Two Fund Portfolio

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JohnDindex
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Re: Jack Bogle - Two Fund Portfolio

Post by JohnDindex »

Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America.

Despite some severe interruptions, our country’s economic progress has been breathtaking…

Never bet against America.”

@WarrenBuffett
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

absolute zero wrote: Tue May 04, 2021 8:07 pm
abuss368 wrote: Tue May 04, 2021 7:26 pm
absolute zero wrote: Tue May 04, 2021 6:05 pm
Are you implying that a Jack Bogle 2 fund portfolio is a good enough solution IF one is willing to work an extra 5-15 years to build their portfolio to >50x expenses? Not even *I* would argue that this portfolio is that undiversified.

I do agree with the general notion that if one insists on neglecting international equities, they need to build a larger portfolio to make up for it.
This is EASY! I am not implying anything. I am stating! I have both family and friends who have total market index funds and retired EARLY! Living from the dividends.

Simple and achievable. When I talk with them, I am modeling and following the same path. Chose the path that works for you. I have chosen mine and it is working.

Tony
That’s great that you have family and friends with >50x expenses. That’s a boat-load of money. That doesn’t take away from the fact that their portfolios are not diversified, if they are using the portfolio that you described in the OP.

High net worth investors have lots of room for error and thus can get away with this portfolio, but that does not mean that it should be recommended to others.
* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Do you own crypto?
absolute zero
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Re: Jack Bogle - Two Fund Portfolio

Post by absolute zero »

abuss368 wrote: Tue May 04, 2021 8:36 pm
absolute zero wrote: Tue May 04, 2021 8:07 pm
abuss368 wrote: Tue May 04, 2021 7:26 pm
absolute zero wrote: Tue May 04, 2021 6:05 pm
Are you implying that a Jack Bogle 2 fund portfolio is a good enough solution IF one is willing to work an extra 5-15 years to build their portfolio to >50x expenses? Not even *I* would argue that this portfolio is that undiversified.

I do agree with the general notion that if one insists on neglecting international equities, they need to build a larger portfolio to make up for it.
This is EASY! I am not implying anything. I am stating! I have both family and friends who have total market index funds and retired EARLY! Living from the dividends.

Simple and achievable. When I talk with them, I am modeling and following the same path. Chose the path that works for you. I have chosen mine and it is working.

Tony
That’s great that you have family and friends with >50x expenses. That’s a boat-load of money. That doesn’t take away from the fact that their portfolios are not diversified, if they are using the portfolio that you described in the OP.

High net worth investors have lots of room for error and thus can get away with this portfolio, but that does not mean that it should be recommended to others.
* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
DSBH
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Re: Jack Bogle - Two Fund Portfolio

Post by DSBH »

absolute zero wrote: Tue May 04, 2021 8:44 pm
abuss368 wrote: Tue May 04, 2021 8:36 pm
absolute zero wrote: Tue May 04, 2021 8:07 pm
abuss368 wrote: Tue May 04, 2021 7:26 pm
absolute zero wrote: Tue May 04, 2021 6:05 pm
Are you implying that a Jack Bogle 2 fund portfolio is a good enough solution IF one is willing to work an extra 5-15 years to build their portfolio to >50x expenses? Not even *I* would argue that this portfolio is that undiversified.

I do agree with the general notion that if one insists on neglecting international equities, they need to build a larger portfolio to make up for it.
This is EASY! I am not implying anything. I am stating! I have both family and friends who have total market index funds and retired EARLY! Living from the dividends.

Simple and achievable. When I talk with them, I am modeling and following the same path. Chose the path that works for you. I have chosen mine and it is working.

Tony
That’s great that you have family and friends with >50x expenses. That’s a boat-load of money. That doesn’t take away from the fact that their portfolios are not diversified, if they are using the portfolio that you described in the OP.

High net worth investors have lots of room for error and thus can get away with this portfolio, but that does not mean that it should be recommended to others.
* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
John C. Bogle: "Never confuse genius with luck and a bull market".
absolute zero
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Re: Jack Bogle - Two Fund Portfolio

Post by absolute zero »

DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm
abuss368 wrote: Tue May 04, 2021 8:36 pm
absolute zero wrote: Tue May 04, 2021 8:07 pm
abuss368 wrote: Tue May 04, 2021 7:26 pm

This is EASY! I am not implying anything. I am stating! I have both family and friends who have total market index funds and retired EARLY! Living from the dividends.

Simple and achievable. When I talk with them, I am modeling and following the same path. Chose the path that works for you. I have chosen mine and it is working.

Tony
That’s great that you have family and friends with >50x expenses. That’s a boat-load of money. That doesn’t take away from the fact that their portfolios are not diversified, if they are using the portfolio that you described in the OP.

High net worth investors have lots of room for error and thus can get away with this portfolio, but that does not mean that it should be recommended to others.
* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Either way it means saving more than is necessary, and it means having lots of room for error.
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Exactly. Combined with no debt. I am watching and observing first hand how it is done. I have one friend who has Total Stock, US REIT, High Dividend, and Total Bond. Has played with technology and healthcare funds too. Still living from the dividends. He may dip toe in real estate crowdfunding.

Different strokes for different folks I guess.

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

Post by abuss368 »

absolute zero wrote: Tue May 04, 2021 8:51 pm
DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm
abuss368 wrote: Tue May 04, 2021 8:36 pm
absolute zero wrote: Tue May 04, 2021 8:07 pm

That’s great that you have family and friends with >50x expenses. That’s a boat-load of money. That doesn’t take away from the fact that their portfolios are not diversified, if they are using the portfolio that you described in the OP.

High net worth investors have lots of room for error and thus can get away with this portfolio, but that does not mean that it should be recommended to others.
* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Either way it means saving more than is necessary, and it means having lots of room for error.
Not really. If they were in international (which has not performed in 35 years cumulative correct) they would have a smaller portfolio.

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

Post by absolute zero »

abuss368 wrote: Tue May 04, 2021 9:04 pm
absolute zero wrote: Tue May 04, 2021 8:51 pm
DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm
abuss368 wrote: Tue May 04, 2021 8:36 pm

* > 50x expenses - Did I say that in my response? You lost me there.

* “but that does not mean that it should be recommended to others.” - Why of course it does! That is the essence of “investing advice inspired by Jack Bogle” and this thread. You may have a more rewarding result if you consider the Three Fund Portfolio thread, which is a great strategy as well. This thread is related to the Jack Bogle and Warren Buffett Two Fund Portfolio. I would like to keep the thread on topic.

Thanks!
Tony
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Either way it means saving more than is necessary, and it means having lots of room for error.
Not really. If they were in international (which has not performed in 35 years cumulative correct) they would have a smaller portfolio.

Tony
That sounds REALLY relevant to an investor who’s trying to choose his or her portfolio today. “Don’t worry about excluding 6,000 investable non-US companies across the globe. You might see US outperform by a ton over the next decade, and then you can live off the dividends, just like my family and friends.”

:confused
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

absolute zero wrote: Tue May 04, 2021 9:09 pm
abuss368 wrote: Tue May 04, 2021 9:04 pm
absolute zero wrote: Tue May 04, 2021 8:51 pm
DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm

With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Either way it means saving more than is necessary, and it means having lots of room for error.
Not really. If they were in international (which has not performed in 35 years cumulative correct) they would have a smaller portfolio.

Tony
That sounds REALLY relevant to an investor who’s trying to choose his or her portfolio today. “Don’t worry about excluding 6,000 investable non-US companies across the globe. You might see US outperform by a ton over the next decade, and then you can live off the dividends, just like my family and friends.”

:confused
Exactly! It has worked and well. I am encouraged personally with our portfolio and thankful for the family and friends who are mentoring along the way!

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

Post by Nathan Drake »

JohnDindex wrote: Tue May 04, 2021 8:29 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America.

Despite some severe interruptions, our country’s economic progress has been breathtaking…

Never bet against America.”

@WarrenBuffett

Owning foreign companies (like Buffett does) isn’t a bet against America
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 8:42 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Do you own crypto?
Not directly
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Nathan Drake wrote: Tue May 04, 2021 9:15 pm
Owning foreign companies (like Buffett does) isn’t a bet against America
While Warren Buffett has recommended investors simply own the S&P 500 and treasuries/cash, Berkshire Hathaway does have substantial international investments.

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

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 9:16 pm
anon_investor wrote: Tue May 04, 2021 8:42 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Do you own crypto?
Not directly
Missing a haystack there. US only still has indirect exposure to international markets...
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Re: Jack Bogle - Two Fund Portfolio

Post by DSBH »

abuss368 wrote: Tue May 04, 2021 9:02 pm
DSBH wrote: Tue May 04, 2021 8:49 pm
absolute zero wrote: Tue May 04, 2021 8:44 pm
With a dividend yield <2%, you have to have >50x expenses to live off the dividends of VTI/VTSAX.
Unless they also have pension and/or social security.
Exactly. Combined with no debt. I am watching and observing first hand how it is done. I have one friend who has Total Stock, US REIT, High Dividend, and Total Bond. Has played with technology and healthcare funds too. Still living from the dividends. He may dip toe in real estate crowdfunding.

Different strokes for different folks I guess.

Tony
Our SS and pension at FRA will take care of about half of our planned expenses, so I have been pondering about living off dividends from a portfolio of 50% VG Total Stock Index and 50% VG High Dividend Index portfolio and never having to worry about selling shares no matter what the market is doing. Just couldn’t do it I guess because I am used to having Bond Index in the portfolio for so long.
John C. Bogle: "Never confuse genius with luck and a bull market".
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 9:46 pm
Nathan Drake wrote: Tue May 04, 2021 9:16 pm
anon_investor wrote: Tue May 04, 2021 8:42 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Do you own crypto?
Not directly
Missing a haystack there. US only still has indirect exposure to international markets...
Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

abuss368 wrote: Tue May 04, 2021 9:26 pm
Nathan Drake wrote: Tue May 04, 2021 9:15 pm
Owning foreign companies (like Buffett does) isn’t a bet against America
While Warren Buffett has recommended investors simply own the S&P 500 and treasuries/cash, Berkshire Hathaway does have substantial international investments.

Tony
Buffett says that’s what he’s leaving his wife

He probably says that because it’s simple. You could do a lot worse

But is it optimal? Another question entirely
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 9:59 pm
anon_investor wrote: Tue May 04, 2021 9:46 pm
Nathan Drake wrote: Tue May 04, 2021 9:16 pm
anon_investor wrote: Tue May 04, 2021 8:42 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Do you own crypto?
Not directly
Missing a haystack there. US only still has indirect exposure to international markets...
Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 10:49 pm
Nathan Drake wrote: Tue May 04, 2021 9:59 pm
anon_investor wrote: Tue May 04, 2021 9:46 pm
Nathan Drake wrote: Tue May 04, 2021 9:16 pm
anon_investor wrote: Tue May 04, 2021 8:42 pm

Do you own crypto?
Not directly
Missing a haystack there. US only still has indirect exposure to international markets...
Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 11:03 pm
anon_investor wrote: Tue May 04, 2021 10:49 pm
Nathan Drake wrote: Tue May 04, 2021 9:59 pm
anon_investor wrote: Tue May 04, 2021 9:46 pm
Nathan Drake wrote: Tue May 04, 2021 9:16 pm

Not directly
Missing a haystack there. US only still has indirect exposure to international markets...
Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 11:13 pm
Nathan Drake wrote: Tue May 04, 2021 11:03 pm
anon_investor wrote: Tue May 04, 2021 10:49 pm
Nathan Drake wrote: Tue May 04, 2021 9:59 pm
anon_investor wrote: Tue May 04, 2021 9:46 pm

Missing a haystack there. US only still has indirect exposure to international markets...
Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 11:19 pm
anon_investor wrote: Tue May 04, 2021 11:13 pm
Nathan Drake wrote: Tue May 04, 2021 11:03 pm
anon_investor wrote: Tue May 04, 2021 10:49 pm
Nathan Drake wrote: Tue May 04, 2021 9:59 pm

Haystack doesn’t include everything you can possibly buy

Crypto isn’t a company. Terrible comparison
My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 11:30 pm
Nathan Drake wrote: Tue May 04, 2021 11:19 pm
anon_investor wrote: Tue May 04, 2021 11:13 pm
Nathan Drake wrote: Tue May 04, 2021 11:03 pm
anon_investor wrote: Tue May 04, 2021 10:49 pm

My haystack doesn't need international equities. I also do not need corporate bonds either. But my allocation between US equities and US treasury bonds, probably will impact my portfolio performance more than not having any international equities. My portfolio is good enough, I survived the lost decade just fine.
Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue May 04, 2021 11:38 pm
anon_investor wrote: Tue May 04, 2021 11:30 pm
Nathan Drake wrote: Tue May 04, 2021 11:19 pm
anon_investor wrote: Tue May 04, 2021 11:13 pm
Nathan Drake wrote: Tue May 04, 2021 11:03 pm

Sure, but it’s your choice to survive a dead decade or longer in equities. Often happens if you’re only in stocks concentrated in one region

A diversified portfolio avoids this
US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue May 04, 2021 11:47 pm
Nathan Drake wrote: Tue May 04, 2021 11:38 pm
anon_investor wrote: Tue May 04, 2021 11:30 pm
Nathan Drake wrote: Tue May 04, 2021 11:19 pm
anon_investor wrote: Tue May 04, 2021 11:13 pm

US treasuries are a better diversifier to US equities than international equities. LTT during the "lost decade" were way better than international equities.
Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
SCV and EM (not a factor per se, but adds to international diversification)

Bonds help, but they won’t save a 4% SWR with poor equity performance
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Wed May 05, 2021 12:19 am
anon_investor wrote: Tue May 04, 2021 11:47 pm
Nathan Drake wrote: Tue May 04, 2021 11:38 pm
anon_investor wrote: Tue May 04, 2021 11:30 pm
Nathan Drake wrote: Tue May 04, 2021 11:19 pm

Not starting at near 0% rates

And diversification isn’t just regional, it’s across factors

The two fund portfolio is at very high risk of very poor performance outcomes at today’s valuations
Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
SCV and EM (not a factor per se, but adds to international diversification)

Bonds help, but they won’t save a 4% SWR with poor equity performance
4% SWR seems unstainably high. I am thinking more like 2.5-3%. Plus I Bonds will help set a floor in early retirement, so less concerned about SORR.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Wed May 05, 2021 8:24 am
Nathan Drake wrote: Wed May 05, 2021 12:19 am
anon_investor wrote: Tue May 04, 2021 11:47 pm
Nathan Drake wrote: Tue May 04, 2021 11:38 pm
anon_investor wrote: Tue May 04, 2021 11:30 pm

Good thing treasuries and savings bonds offer better than 0% rates. I Bonds pay 3.54% right now, 7 year treasury bonds are close to 1.3%.

Do you hold world market cap? Any bonds? Any gold?
Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
SCV and EM (not a factor per se, but adds to international diversification)

Bonds help, but they won’t save a 4% SWR with poor equity performance
4% SWR seems unstainably high. I am thinking more like 2.5-3%. Plus I Bonds will help set a floor in early retirement, so less concerned about SORR.
Historically 4% has been safe, but obviously if you lack diversity it will probably reduce what you can withdrawal.

Bonds returning less than inflation and equities being depressed during a long downturn will do that
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Wed May 05, 2021 8:35 am
anon_investor wrote: Wed May 05, 2021 8:24 am
Nathan Drake wrote: Wed May 05, 2021 12:19 am
anon_investor wrote: Tue May 04, 2021 11:47 pm
Nathan Drake wrote: Tue May 04, 2021 11:38 pm

Those rates won’t do you much good if equities do very poorly and you have a bad SORR scenario

No bonds, no gold, about world cap with some factor exposures
What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
SCV and EM (not a factor per se, but adds to international diversification)

Bonds help, but they won’t save a 4% SWR with poor equity performance
4% SWR seems unstainably high. I am thinking more like 2.5-3%. Plus I Bonds will help set a floor in early retirement, so less concerned about SORR.
Historically 4% has been safe, but obviously if you lack diversity it will probably reduce what you can withdrawal.

Bonds returning less than inflation and equities being depressed during a long downturn will do that
I Bonds should at least come close to matching inflation. I would probably end up buying TIPS as well. I am not sure even a globally diversified equity portfolio could sustain a 4% SWR without adjustments after an equity crash. If US equities crash, it is very likely international equities will crash too. At which point you will wish you had fixed income assets.
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Re: Jack Bogle - Two Fund Portfolio

Post by JohnDindex »

Nathan Drake wrote: Tue May 04, 2021 9:15 pm
JohnDindex wrote: Tue May 04, 2021 8:29 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America.

Despite some severe interruptions, our country’s economic progress has been breathtaking…

Never bet against America.”

@WarrenBuffett

Owning foreign companies (like Buffett does) isn’t a bet against America
But that is not the discussion. A large portion of US companies have substantial investments overseas, including Berkshire. But berkshire is a US company, an SP500 company. The s&p500 includes 500 of the most premier management teams in the world. I think many here are saying they are comfortable allowing them to allocate capital as they see fit. Berkshire is free to invest as much or as little in Europe & Asia as they see fit.
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Re: Jack Bogle - Two Fund Portfolio

Post by ruralavalon »

Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should you take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Last edited by ruralavalon on Wed May 05, 2021 11:28 am, edited 1 time in total.
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Re: Jack Bogle - Two Fund Portfolio

Post by bertilak »

ruralavalon wrote: Wed May 05, 2021 10:02 am
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

bertilak wrote: Wed May 05, 2021 11:19 am
ruralavalon wrote: Wed May 05, 2021 10:02 am
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
They should have been buying US treasuries.
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

bertilak wrote: Wed May 05, 2021 11:19 am
ruralavalon wrote: Wed May 05, 2021 10:02 am
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
Maybe US only investors are buying the wrong haystack today at elevated valuations
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

JohnDindex wrote: Wed May 05, 2021 9:26 am
Nathan Drake wrote: Tue May 04, 2021 9:15 pm
JohnDindex wrote: Tue May 04, 2021 8:29 pm
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
“In its brief 232 years of existence… there has been no incubator for unleashing human potential like America.

Despite some severe interruptions, our country’s economic progress has been breathtaking…

Never bet against America.”

@WarrenBuffett

Owning foreign companies (like Buffett does) isn’t a bet against America
But that is not the discussion. A large portion of US companies have substantial investments overseas, including Berkshire. But berkshire is a US company, an SP500 company. The s&p500 includes 500 of the most premier management teams in the world. I think many here are saying they are comfortable allowing them to allocate capital as they see fit. Berkshire is free to invest as much or as little in Europe & Asia as they see fit.
That argument doesn’t hold

Japan in the 80s had the vast majority of sales outside of Japan. That’s not an adequate argument for tilting away from
A global portfolio
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Wed May 05, 2021 8:44 am
Nathan Drake wrote: Wed May 05, 2021 8:35 am
anon_investor wrote: Wed May 05, 2021 8:24 am
Nathan Drake wrote: Wed May 05, 2021 12:19 am
anon_investor wrote: Tue May 04, 2021 11:47 pm

What factor exposures? SCV?

I Bonds will help us avoid SORR. Nothing better than inflation AND deflation protected funds guaranteed by the US treasury.
SCV and EM (not a factor per se, but adds to international diversification)

Bonds help, but they won’t save a 4% SWR with poor equity performance
4% SWR seems unstainably high. I am thinking more like 2.5-3%. Plus I Bonds will help set a floor in early retirement, so less concerned about SORR.
Historically 4% has been safe, but obviously if you lack diversity it will probably reduce what you can withdrawal.

Bonds returning less than inflation and equities being depressed during a long downturn will do that
I Bonds should at least come close to matching inflation. I would probably end up buying TIPS as well. I am not sure even a globally diversified equity portfolio could sustain a 4% SWR without adjustments after an equity crash. If US equities crash, it is very likely international equities will crash too. At which point you will wish you had fixed income assets.
The risk isn’t in the short term crash

It’s 10+ years of poor performance

Yes, any short term shock will hurt all equities, but the decade thereafter could be very different even if they are correlated
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Jack Bogle - Two Fund Portfolio

Post by bertilak »

Nathan Drake wrote: Wed May 05, 2021 12:03 pm
bertilak wrote: Wed May 05, 2021 11:19 am
ruralavalon wrote: Wed May 05, 2021 10:02 am
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
Maybe US only investors are buying the wrong haystack today at elevated valuations
Don't bet against America's haystack!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

bertilak wrote: Wed May 05, 2021 12:09 pm
Nathan Drake wrote: Wed May 05, 2021 12:03 pm
bertilak wrote: Wed May 05, 2021 11:19 am
ruralavalon wrote: Wed May 05, 2021 10:02 am
Nathan Drake wrote: Tue May 04, 2021 8:15 pm Was a Japanese only investor in the 80s buying the haystack?

Jack was right about many things but that doesn’t mean he’s right about everything or that what he says isn’t up for debate.

You should never dogmatically take anyone’s opinion as gospel.
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
Maybe US only investors are buying the wrong haystack today at elevated valuations
Don't bet against America's haystack!
I’d argue it would be wiser to be 100% exUS right now than 100% US
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 »

I don't think Mr. Bogle actually held a 2-fund portfolio himself. The VG balanced index fund was his core holding but he often discussed in interviews tilts that he held at times, such as tilting toward credit (corporate bonds) with his bond allocation. He also sometimes described tactical asset allocation that he practiced-- adjusting stock/bond ratio, bond duration, or credit tilt according to market and economic conditions.

I don't know if he improved return by doing those things, but it takes more discipline than many individual investors possess. You have to re-allocate to a position you are willing to hold forever, and stay the course if you guess wrong.
Last edited by Northern Flicker on Wed May 05, 2021 2:15 pm, edited 1 time in total.
DSBH
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Re: Jack Bogle - Two Fund Portfolio

Post by DSBH »

Nathan Drake wrote: Wed May 05, 2021 12:17 pm
bertilak wrote: Wed May 05, 2021 12:09 pm
Nathan Drake wrote: Wed May 05, 2021 12:03 pm
bertilak wrote: Wed May 05, 2021 11:19 am
ruralavalon wrote: Wed May 05, 2021 10:02 am
Nor should take dogmaticly take the Efficient Market Hypothesis as gospel. It's called a "hypothesis" for a reason.
Maybe that Japanese investor bought the wrong haystack.
Maybe US only investors are buying the wrong haystack today at elevated valuations
Don't bet against America's haystack!
I’d argue it would be wiser to be 100% exUS right now than 100% US
Wiser for the next few weeks, or few months, or few years, or next 20 years?
John C. Bogle: "Never confuse genius with luck and a bull market".
tallgrass
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Re: Jack Bogle - Two Fund Portfolio

Post by tallgrass »

The Two Fund Portfolio is infinitely better than some of the stock picking approaches people often take. (like dumping 100% into Tesla or Gamestop or whatever). It seems a little unfair to break out the torches and pitchforks just because someone doesn't include a little international in there.

Other than 5 years or so in the early 2000's when US large cap was suffering a hangover from the tech crash, you have to go back to the 70's and 80's to find sustained outperformance of international. I wonder how international vs US would have compared during those two decades without the dramatic rise and subsequent supernova of Japan's market. Much of the argument for International providing similar returns to US seems to hinge on that EAFE data from 1970's and 80's.

Nevertheless, as much as I admire the "simplicity" of the 2 fund approach, I've never felt entirely comfortable implementing it. If one puts, say, 20% of equities in International and then US continues to outperform for the next 30 years, I'm still going to have a fine retirement.

If, on the other hand, US and International's returns are opposites of what they've been for the last 30 years and US underperforms, then juicing up my returns with that 20% of international could be just enough to keep my head above water. It seems a bit imprudent not to include a little international, like "saving" money by not paying home owner's insurance. There's just too much at stake and the cost is unlikely to be a game changer if I end up not needing it.
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Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

None of the two funders, to my knowledge, have really answered the very simple question of why exclude international equities?

Cost isn't a good reason. It's a few basis points higher.

Currency risk isn't a good reason. Actually, it's a very bad reason.

Tax inefficiency isn't a good reason. International index funds are very tax efficient.

So why purposely and intentionally exclude them?

Is it really just because Jack and Warren said so?
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Re: Jack Bogle - Two Fund Portfolio

Post by tomd37 »

Quite often when I view posts like this one where readers are going back and forth on the pros and cons of a certain part of the investment market, I wish I know how to post an attachment. If I could I would post The Callan Periodic Table of Investment Returns just to share that info. The current table reflects the twenty-year period 2001 through 2020.
Tom D.
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Justfinance
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Re: Jack Bogle - Two Fund Portfolio

Post by Justfinance »

Sounds like home bias to me ...

Simple 2 fund portfolio in my own Bogle worldwide view:

Vanguard FTSE All World Equity not hedged in $ 3/4 (75%) Ireland domiciled ETF
Vanguard Global Aggregate Bond hedged in € 1/4 (25%) Ireland domiciled Index Fund

Withdrawal rate 2,5%
Rebalancing once 5% off target

Stay the course less travelled since 2003 ... :sharebeer
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Taylor Larimore
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The Callan Periodic Table of Investment Returns

Post by Taylor Larimore »

tomd37 wrote: Wed May 05, 2021 1:22 pm Quite often when I view posts like this one where readers are going back and forth on the pros and cons of a certain part of the investment market, I wish I know how to post an attachment. If I could I would post The Callan Periodic Table of Investment Returns just to share that info. The current table reflects the twenty-year period 2001 through 2020.
tomd37:

Here is a link to The Callan Periodic Table of Investment Returns:

https://www.wtwealthmanagement.com/docu ... -table.pdf

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Selecting funds that will significantly exceed market returns, a search in which hope springs eternal and in which past performance has proven of virtually no predictive value, is a loser’s game.” "The Vanguard Total Stock Market Index fund and its Total Bond Market cousin represent the purest form of common-sense investing."


"Simplicity is the master key to financial success." -- Jack Bogle
bgf
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Re: Jack Bogle - Two Fund Portfolio

Post by bgf »

Northern Flicker wrote: Wed May 05, 2021 12:31 pm I don't think Mr. Bogle actually held a 2-fund portfolio himself.
Warren Buffett never has and never will hold the 2-fund portfolio.

The "Astrid Menks Portfolio" just doesn't have the same rhetorical force, so we're unfortunately force-fed the "Warren Buffett and Jack Bogle Two Fund Portfolio" several times a day whenever this thread is inevitably 'bumped.'
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
tomd37
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Re: Jack Bogle - Two Fund Portfolio

Post by tomd37 »

Thanks for posting that Taylor. Good illustration of the movement of various investments from year to year over an extended period of time.
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anon_investor
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Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Triple digit golfer wrote: Wed May 05, 2021 1:17 pm None of the two funders, to my knowledge, have really answered the very simple question of why exclude international equities?

Cost isn't a good reason. It's a few basis points higher.

Currency risk isn't a good reason. Actually, it's a very bad reason.

Tax inefficiency isn't a good reason. International index funds are very tax efficient.

So why purposely and intentionally exclude them?

Is it really just because Jack and Warren said so?
Sovereign risk. The US just has better legal protections for investors. Plus who needs international when you have an emergency fund? :twisted:
absolute zero
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Re: Jack Bogle - Two Fund Portfolio

Post by absolute zero »

bgf wrote: Wed May 05, 2021 1:56 pm
Northern Flicker wrote: Wed May 05, 2021 12:31 pm I don't think Mr. Bogle actually held a 2-fund portfolio himself.
Warren Buffett never has and never will hold the 2-fund portfolio.

The "Astrid Menks Portfolio" just doesn't have the same rhetorical force, so we're unfortunately force-fed the "Warren Buffett and Jack Bogle Two Fund Portfolio" several times a day whenever this thread is inevitably 'bumped.'
The "Astrid Menks Portfolio." That's funny. I like it.

This thread occasionally dies for a month at a time, but then the OP always feels the need to revive the thread by bumping it. Not sure why. I think he wants it to build up to a high post-count. Either way this is basically just another US vs exUS thread.
Nathan Drake
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Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

DSBH wrote: Wed May 05, 2021 1:00 pm
Nathan Drake wrote: Wed May 05, 2021 12:17 pm
bertilak wrote: Wed May 05, 2021 12:09 pm
Nathan Drake wrote: Wed May 05, 2021 12:03 pm
bertilak wrote: Wed May 05, 2021 11:19 am
Maybe that Japanese investor bought the wrong haystack.
Maybe US only investors are buying the wrong haystack today at elevated valuations
Don't bet against America's haystack!
I’d argue it would be wiser to be 100% exUS right now than 100% US
Wiser for the next few weeks, or few months, or few years, or next 20 years?
Next decade or longer

100% exUS would also give you far more diversification as it relates to currencies, geography, emerging markets, and global market cap
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 »

deleted
Last edited by Northern Flicker on Wed May 05, 2021 10:23 pm, edited 1 time in total.
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