Is 100% VTSAX (+ bonds) the best portfolio?

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JustinR
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Is 100% VTSAX (+ bonds) the best portfolio?

Post by JustinR » Thu Mar 29, 2018 5:15 pm

I'm back testing using portfolio visualizer and VTSAX with bonds (such as 80% VTSAX, 20% total bond) beats anything I throw at it.

Is a 2-fund portfolio actually the best thing to do?

Using tickers: https://www.portfoliovisualizer.com/backtest-portfolio
Using asset classes: https://www.portfoliovisualizer.com/bac ... allocation

MathWizard
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by MathWizard » Thu Mar 29, 2018 5:23 pm

JustinR wrote:
Thu Mar 29, 2018 5:15 pm
I'm back testing using portfolio visualizer and VTSAX with bonds (such as 80% VTSAX, 20% total bond) beats anything I throw at it.

Is a 2-fund portfolio actually the best thing to do?

Using tickers: https://www.portfoliovisualizer.com/backtest-portfolio
Using asset classes: https://www.portfoliovisualizer.com/bac ... allocation
I added international as well, since VTSAX is all US companies.

bikechuck
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by bikechuck » Thu Mar 29, 2018 5:26 pm

JustinR wrote:
Thu Mar 29, 2018 5:15 pm
I'm back testing using portfolio visualizer and VTSAX with bonds (such as 80% VTSAX, 20% total bond) beats anything I throw at it.

Is a 2-fund portfolio actually the best thing to do?

Using tickers: https://www.portfoliovisualizer.com/backtest-portfolio
Using asset classes: https://www.portfoliovisualizer.com/bac ... allocation
What in Heaven's name is VTSAX ?

JohnFiscal
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by JohnFiscal » Thu Mar 29, 2018 5:29 pm

bikechuck wrote:
Thu Mar 29, 2018 5:26 pm
What in Heaven's name is VTSAX ?
Vanguard Total Stock Market Index Fund Admiral Shares

ChinchillaWhiplash
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by ChinchillaWhiplash » Thu Mar 29, 2018 5:32 pm

JL Collins think so. He makes valid point in his book "The Simple Path to Wealth". It has worked in the past, but who knows what the future holds. Argument is that most major US companies are global in their scope anyway, so internatial is not necessary. Definitely would make investing a lot easier.

sonosoldi3112
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by sonosoldi3112 » Thu Mar 29, 2018 5:37 pm

I am 100% VWIAX ... I think for me it is perfect .. nearing retirement & has way less volatility than most other funds ... performs well in past and in present and hopefully future. No one knows for sure .. but is the allocation I want . Funny VTMFX is performing a tad better and partly tax free .. and that is my # 2 fund.

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willthrill81
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by willthrill81 » Thu Mar 29, 2018 5:43 pm

sonosoldi3112 wrote:
Thu Mar 29, 2018 5:37 pm
I am 100% VWIAX ... I think for me it is perfect .. nearing retirement & has way less volatility than most other funds ... performs well in past and in present and hopefully future. No one knows for sure .. but is the allocation I want . Funny VTMFX is performing a tad better and partly tax free .. and that is my # 2 fund.
While I'm a big stock proponent (100% stocks myself), I find the long-term performance of Wellesley very intriguing and close to amazing (over its lifetime of nearly 50 years, it only lags the S&P 500 by about .6% annually). From the year 2000 until now, it has had significantly higher returns than the total stock market and with far less volatility. Granted, 2000-2009 was an unusual period in that bonds beat stocks, but even after the bull run of the last nine years, Wellesley is still ahead. Many say that it cannot repeat the performance of the last nearly 50 years due to rising interest rates, but even when interest rates rose in the past, Wellesley still did quite well.

About 2/3 of my EF is parked in Wellesley, and I have no intentions of moving it. For many retirees, I think that 100% Wellesley (or Global Wellesley) is a very fine option.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Taylor Larimore
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by Taylor Larimore » Thu Mar 29, 2018 5:59 pm

willthrill81 wrote:
Thu Mar 29, 2018 5:43 pm
sonosoldi3112 wrote:
Thu Mar 29, 2018 5:37 pm
I am 100% VWIAX ... I think for me it is perfect .. nearing retirement & has way less volatility than most other funds ... performs well in past and in present and hopefully future. No one knows for sure .. but is the allocation I want . Funny VTMFX is performing a tad better and partly tax free .. and that is my # 2 fund.
While I'm a big stock proponent (100% stocks myself), I find the long-term performance of Wellesley very intriguing and close to amazing (over its lifetime of nearly 50 years, it only lags the S&P 500 by about .6% annually). From the year 2000 until now, it has had significantly higher returns than the total stock market and with far less volatility. Granted, 2000-2009 was an unusual period in that bonds beat stocks, but even after the bull run of the last nine years, Wellesley is still ahead. Many say that it cannot repeat the performance of the last nearly 50 years due to rising interest rates, but even when interest rates rose in the past, Wellesley still did quite well.

About 2/3 of my EF is parked in Wellesley, and I have no intentions of moving it. For many retirees, I think that 100% Wellesley (or Global Wellesley) is a very fine option.
Willthrill181:

Wellesley has been a fine balanced fund. However, I doubt its returns (especially after-tax returns) are likely to outperform Total Stock Market Index Funds over longer periods.

According to Morningstar these are 10 and 15 year annualized returns for the two funds:

Fund -------------------------------10-years -- 15-years

Wellesley (VWINX) -----------------7.02%------7.11%
Total Stock Market (VTSMX)-------9.53%-----10.27%

Past performance does not forecast future performance.

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

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stemikger
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by stemikger » Thu Mar 29, 2018 6:01 pm

ChinchillaWhiplash wrote:
Thu Mar 29, 2018 5:32 pm
JL Collins think so. He makes valid point in his book "The Simple Path to Wealth". It has worked in the past, but who knows what the future holds. Argument is that most major US companies are global in their scope anyway, so internatial is not necessary. Definitely would make investing a lot easier.
I think if you want an all U.S. simple portfolio this is the way to go. JL Collins describes it perfectly in his book The Simple Path to Wealth and many of his blogs and You Tube videos. Of course, Jack Bogle describes it the best.

If you want a 60/40 portfolio and never have to worry about your portfolio again, go with the Vanguard Balanced Index Fund. That is what I am doing and even got Jack's personal blessing via last year's Q&A. It would be hard to get a better endorsement then that.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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oldzey
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by oldzey » Thu Mar 29, 2018 8:09 pm

It works for me. 8-)
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

dbr
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by dbr » Thu Mar 29, 2018 8:54 pm

As soon as you start muttering about "best" you will be irretrievably lost. A better question to ask is 100% VTSAX (+bonds) good enough. The answer to that is yes, maybe, and no, depending on what you are trying to do. Normally there are lots and lots of other choices that are also good enough if that combination is.

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saltycaper
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by saltycaper » Thu Mar 29, 2018 9:07 pm

JustinR wrote:
Thu Mar 29, 2018 5:15 pm

Is a 2-fund portfolio actually the best thing to do?
It is not hard to find portfolios that have outperformed, if that is your definition of "best." So, no.
Quod vitae sectabor iter?

ny_rn
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by ny_rn » Thu Mar 29, 2018 9:14 pm

It works for me. I solely own this across my 403(b), roth and taxable account. I love simplicity.

"There is more than one road to Dublin." - Taylor Larimore

MotoTrojan
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by MotoTrojan » Thu Mar 29, 2018 10:07 pm

You clearly haven't back-tested small-cap value :).

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stemikger
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Re: Is 100% VTSAX (+ bonds) the best portfolio?

Post by stemikger » Thu Mar 29, 2018 10:45 pm

dbr wrote:
Thu Mar 29, 2018 8:54 pm
As soon as you start muttering about "best" you will be irretrievably lost. A better question to ask is 100% VTSAX (+bonds) good enough. The answer to that is yes, maybe, and no, depending on what you are trying to do. Normally there are lots and lots of other choices that are also good enough if that combination is.
+1

Investing is like Horseshoes, close enough can also win.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!

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