The Three-Fund Portfolio

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bossballer41
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Re: The Three-Fund Portfolio

Post by bossballer41 » Sun Jun 11, 2017 3:11 pm

LadyGeek wrote:^^^ You're welcome.

New member bossballer41 has a question which I've moved into a stand-alone post, see: Starting a Three-Fund Portfolio - which funds?
Thanks LadyGeek :happy , I wasn't sure where to post it

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SacredSword93
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Re: The Three-Fund Portfolio

Post by SacredSword93 » Thu Jun 15, 2017 1:17 am

Thank you Taylor for keeping things simple! :!:

LXEX55
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Re: The Three-Fund Portfolio

Post by LXEX55 » Sun Jun 18, 2017 5:33 am

May I ask what would be the suggested allocation of these three funds for a person who retires at age 63? Would you just do 33% each or go heavier on one fund?

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Re: The Three-Fund Portfolio

Post by TheTimeLord » Sun Jun 18, 2017 7:43 am

Taylor Larimore wrote:After a lifetime of investing since 1950 trying to "beat the market," I am convinced that a simple 3-fund (or ETF) portfolio of Total Stock Market, Total International, and Total Bond Market, properly allocated, is an ideal portfolio for most investors.
The more I struggle to perfect and tilt my portfolio with ever smaller adjustments the more apparent the inherent wisdom of the 3 fund portfolio becomes. It is a a marvelous straightforward solution to a complex issue, dare I say it is a supremely elegant solution. Thank you.
Run, You Clever Boy! 8723

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Re: The Three-Fund Portfolio

Post by tsturbo » Sun Jun 18, 2017 8:09 am

LXEX55 wrote:May I ask what would be the suggested allocation of these three funds for a person who retires at age 63? Would you just do 33% each or go heavier on one fund?
I think you are looking for information on how to determine your AA, based on your age. Once you decide what your AA should be, 80/20; 50/50; 40/60 etc. then allocate as follows:

For example, 50% of my portfolio is bonds, the other 50% is equities which 2/3 is TSM and 1/3 International

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Re: The Three-Fund Portfolio

Post by Taylor Larimore » Sun Jun 18, 2017 2:38 pm

LXEX55 wrote:May I ask what would be the suggested allocation of these three funds for a person who retires at age 63? Would you just do 33% each or go heavier on one fund?
LXEX55:

Please read the part about "Asset-Allocation" in my opening post (OP).

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: The Three-Fund Portfolio

Post by abuss368 » Sun Jun 18, 2017 2:52 pm

LXEX55 wrote:May I ask what would be the suggested allocation of these three funds for a person who retires at age 63? Would you just do 33% each or go heavier on one fund?
Jack Bogle will typically recommend "age in bonds" to start. An investors asset allocation is dependent on timeframe, tolerance for risk, and goals.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Allan Roth: One advisor to another.

Post by Taylor Larimore » Thu Jun 22, 2017 10:54 pm

Bogleheads:

Below are excerpts from an article by Allan Roth in the Financial Planning publication written for financial advisors:
"As an example of simplicity, over a decade ago I taught my son how to invest using just three index funds:

· A total stock index fund such as VTSMX
· A total international stock index fund such as VGTSX
· A total bond fund such as VBTLX

With these funds (or better yet, lower cost share classes of these funds), my son owned virtually every publicly held company on the planet, as well as an approximation of nearly every fixed-rate investment grade bond in the U.S."


"Noble Laureate William Sharpe’s paper "Arithmetic and Active Management" proved that owning the entire market at the lowest costs must beat the majority of investors."

"Owning even one other stock fund will actually decrease diversification since it will be making specific bets on industries, styles, or other factors."

"Over the years, I’ve benchmarked hundreds of portfolios against the equivalent weighted three-fund portfolio and can count on one hand the number of portfolios I’ve seen that bested this benchmark."

"The simple three-fund portfolio with a target and tolerance range for each fund sends the client on their way without them needing me in the future."
https://www.financial-planning.com/slid ... ury-so-far

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

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Re: The Three-Fund Portfolio

Post by LXEX55 » Sat Jun 24, 2017 4:26 am

This is very similar to what Ben Stein recommends in YES, YOU CAN STILL RETIRE COMFORTABLY. Only difference is, Stein includes Inflation Indexed Bond fund, along with the other three mentioned. He recommends 25% for each fund, no matter what your age. I am not sure I am going to go with the 50% in stocks. I know at 63 I am a long term investor, but, that still seems a little high for me.

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Re: The Three-Fund Portfolio

Post by watchnerd » Sat Jul 01, 2017 9:25 pm

Drew31 wrote:Since I'm debating removing my tilts for a 3fund in another thread I'm curious for those that have held the 3 fund for s number of years have you had any regrets? Ever felt as if you were "missing out"?
No, because:

1. The highest returning asset allocation can only be known in hindsight.

2. The purpose of my asset allocation is to meet my investment goals, not be the highest returning.

3. Per Brinson et al, 1986, the vast majority of a portfolio's return is determined by its asset allocation (mostly the stock/bond/cash ratios).

That being said, I do modify the 3 Fund by using exclusively Treasuries for my bond allocation; the higher correlation of corp bonds to equities, when compared to Treasuries, is something I prefer not to have.
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

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Re: The Three-Fund Portfolio

Post by watchnerd » Sat Jul 01, 2017 9:38 pm

selftalk wrote:Unfortunately a lot of folks are PEEKING at this time and seeing how the international arena is under performing the U.S. and are getting worried and impatient. We`ve read a lot about the performances of different asset classes on this website and intellectually we all know about reversion to the mean AND YET THE HUMAN EMOTIONS TAKE HOLD and try to motivate us into action. Stay the course is not for sissies I suppose. Have and muster up GRIT as it will most probably get you where you want to go in the long run by doing what`s been proven successful in years gone past.
Fast forward to 2017 and International is beating US YTD:

Image

VTI = Vanguard US Total Stock Market Index
VXUS = Vanguard International Total Stock Market Index
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

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Re: The Three-Fund Portfolio

Post by watchnerd » Sat Jul 01, 2017 10:05 pm

selftalk wrote:I`m comfortable to do what Buffett and Bogle suggest and that is own the S&P 500 for Buffett and the Total Stock Market Index Fund suggested by Bogle. Both funds have earned almost exactly the same results over the long term. My proxy for a bond fund however is my monthly income from my pension and my monthly income from social security. How can you argue against what these two masters advocate. I try to learn from the best and not chase rainbows ( other allocations ) written by other authorities to beat the major index.
I can argue against holding both the S&P500 and Total Stock Market Index because the two funds have a 0.99 correlation with each other since 2001. You're not getting any diversification benefits by holding both.

Pick one or the other.
Tweaked 3-Fund: 35% US Equities | 35% Total International | 30% Intermediate Treasuries

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Re: The Three-Fund Portfolio

Post by gvsucavie03 » Mon Jul 03, 2017 8:17 am

watchnerd wrote:
selftalk wrote:I`m comfortable to do what Buffett and Bogle suggest and that is own the S&P 500 for Buffett and the Total Stock Market Index Fund suggested by Bogle. Both funds have earned almost exactly the same results over the long term. My proxy for a bond fund however is my monthly income from my pension and my monthly income from social security. How can you argue against what these two masters advocate. I try to learn from the best and not chase rainbows ( other allocations ) written by other authorities to beat the major index.
I can argue against holding both the S&P500 and Total Stock Market Index because the two funds have a 0.99 correlation with each other since 2001. You're not getting any diversification benefits by holding both.

Pick one or the other.
Pretty sure selftalk meant TSM and TBM (or S&P/TBM) as this is what Bogle recommends.

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Re: The Three-Fund Portfolio

Post by dbr » Mon Jul 03, 2017 8:21 am

gvsucavie03 wrote:
watchnerd wrote:
selftalk wrote:I`m comfortable to do what Buffett and Bogle suggest and that is own the S&P 500 for Buffett and the Total Stock Market Index Fund suggested by Bogle. Both funds have earned almost exactly the same results over the long term. My proxy for a bond fund however is my monthly income from my pension and my monthly income from social security. How can you argue against what these two masters advocate. I try to learn from the best and not chase rainbows ( other allocations ) written by other authorities to beat the major index.
I can argue against holding both the S&P500 and Total Stock Market Index because the two funds have a 0.99 correlation with each other since 2001. You're not getting any diversification benefits by holding both.

Pick one or the other.
Pretty sure selftalk meant TSM and TBM (or S&P/TBM) as this is what Bogle recommends.
No, I think the reference is to Buffett suggesting one thing and Bogle suggesting a (not different) different thing and the OP has decided to blend the two suggestions. The OP is also following Bogle's advice that you can let pensions and SS stand in for bonds and not actually invest in any bonds, if that is how it works out.

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Re: The Three-Fund Portfolio

Post by stuart2010 » Mon Jul 03, 2017 10:32 pm

Going to moves home sale proceeds to the three fund portfolio.

Wanted to use Vanguard Life Strategy fund but upon review it is a four fund portfolio with a total international bond fund. From reading previous posts by Taylor and other it appears a total international bond index fund is not necessary or advisable.

My questions are two:

1) Why did Vanguard make the Life Strategy Fund with the total international bond fund?

2)Should i skip the Life Strategy fund and just go to the separate three Vanguard funds; Total US stock, Total International Stock and Total US Bond?

Thanks,

Stu

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Re: The Three-Fund Portfolio

Post by Duckie » Tue Jul 04, 2017 3:00 pm

stuart2010 wrote:Why did Vanguard make the Life Strategy Fund with the total international bond fund?
Because in Vanguard's opinion adding the international bond fund provides more diversification and is a good thing. I'm not in favor of it.
Should i skip the Life Strategy fund and just go to the separate three Vanguard funds; Total US stock, Total International Stock and Total US Bond?
What is the purpose of this money? When do you expect to need it? Is it part of your retirement portfolio (which the three-fund portfolio was designed for) or something else? Since it is likely that these home sale proceeds are going into a taxable account, using a balanced fund like LifeStrategy with its taxable bonds is not the best option. And if you go with the three separate funds you should reconsider the Total US Bond fund and perhaps use a muni bond fund.

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Re: The Three-Fund Portfolio

Post by Slov » Wed Jul 12, 2017 8:25 pm

I have a few simple questions. What would be a proper substitute for the VBTLX bond fund? I don't have 10k out to start, but I would like to start my taxable account with Vanguard. I am maxing my Roth IRA already and will be receiving a full match on my contributions if I join the new retirement system next year with my job.

Now, I also invest in the TSP... since I am military. Fishing50 advised/ recommended me to ignore VBTLX and go with the G and F funds of the TSP. Would this be something you recommend? ? I am already in the L2050 fund for my TSP, and the 2060 Target retirement fund with Vanguard.

Is my asset allocation in my taxable account, and G/F funds ( if I was to go this route) change my portfolio allocation? My 2060 Trgt is at 90% stock 10% bond. My L2050 fund is at 80/20... I would like for my taxable account to be the same if thats smart?

My main long term goal is general investing, but also as a home and land fund. I won't need this fund for a while. While in the military they provide for your housing. So, It wouldn't be smart for me to buy a home when I move every few years or so. I don't know when I'm getting out. It could be 5,10, or 20 years. So, this is going to be more of a long term investment. Is this smart? I'm still learning about my taxable account. Only 21, haha.

Explanation of TSP funds:
https://www.tsp.gov/InvestmentFunds/Fun ... atrix.html

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Re: The Three-Fund Portfolio

Post by Taylor Larimore » Wed Jul 12, 2017 8:44 pm

Now, I also invest in the TSP... since I am military. Fishing50 advised/ recommended me to ignore VBTLX and go with the G and F funds of the TSP. Would this be something you recommend? ? I am already in the L2050 fund for my TSP, and the 2060 Target retirement fund with Vanguard.

Slov:

There is no need to complicate your portfolio with G & F fixed-income funds because you already have bond funds in TSP and Vanguard. Decide on your overall stock/bond ratio and pick the appropriate Lifecycle funds.

Use Vanguard's low-cost, tax-efficient Total Stock Market and/or Total International Stock Market in your taxable account.

Thank you for your service to our country!

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

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Re: The Three-Fund Portfolio

Post by Kennyt7 » Thu Jul 13, 2017 7:41 pm

you need a small cap fund and an em fund

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Re: The Three-Fund Portfolio

Post by Avo » Thu Jul 13, 2017 7:47 pm

Uh, no you don't! This is the Three-Fund Portfolio thread! Three for all and all for three!

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Re: The Three-Fund Portfolio

Post by Taylor Larimore » Thu Jul 13, 2017 8:06 pm

Kennyt7 wrote:you need a small cap fund and an em fund
Kennyt7:

The Three-Fund Portfolio already has the market's weight in small-cap stocks and emerging market stocks. Whether it is worthwhile to over-weight a market portfolio with overlapping funds having higher cost, less tax-efficiency and more complexity is a debate for another forum.
Warren Buffett: "There seems to be some perverse human characteristic that likes to make easy things difficult."
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: The Three-Fund Portfolio

Post by selftalk » Fri Jul 14, 2017 3:44 pm

Human nature with regards to investing and/or emotion being as it is thinks that the more intricate and complicated something is the more profitable it will become. Boy has that ever been proven wrong time and again but human nature keeps on trying.

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Re: The Three-Fund Portfolio

Post by Kennyt7 » Fri Jul 14, 2017 4:23 pm

historically small caps win the stock allocation; about 12%

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Re: The Three-Fund Portfolio

Post by selftalk » Sat Jul 15, 2017 8:50 am

Ask yourself : Is over weighting small caps chasing performance ? It may very well be. The 3 fund portfolio is very simple. Why not keep it that way ? In time it has a very high probability to get you to your financial goals. Don`t over think it.

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"How many funds are needed to diversify"

Post by Taylor Larimore » Tue Jul 18, 2017 10:48 am

Bogleheads:

Walter Updegrave, retired senior editor at MONEY magazine, has written an important article about the number of funds needed for adequate diversification. These are excerpts:
"When you're building a portfolio for retirement -- or any other purpose, for that matter -- your goal shouldn't be to load up with as many different types of investments as you can (although you can certainly get that impression given the constant flow of new and often gimmicky funds and ETFs that financial services funds churn out)."

"I prefer the total stock market fund approach I described above rather than separate funds for large-, mid- and small-cap stocks because it keeps things simpler and requires less monitoring and managing of one's portfolio."

"If you start throwing yet more funds into your current mix, I'd say you run the risk of turning your portfolio into an unwieldy mishmash of overlapping holdings that don't work together as a coherent whole. In short, you stand a good chance of "di-worse-ifying" rather than diversifying."

"Your next step is to make sure that your stock and bond holdings generally reflect the makeup of the stock and bond market overall. For example, large-company stocks account for roughly 70% of total stock market value, while midcaps and small-caps represent about 20% and 10% respectively. Your holdings don't have to mirror these percentages exactly. But if you want a truly diversified portfolio with a risk profile largely in line with that of the market overall, then you don't want your portfolio's proportions to be too far off either."

"Don't assume that more is better when it comes to funds."
http://money.cnn.com/2017/06/28/retirem ... index.html

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

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Re: "How many funds are needed to diversify"

Post by abuss368 » Tue Jul 18, 2017 1:50 pm

Taylor Larimore wrote:Bogleheads:

Walter Updegrave, retired senior editor at MONEY magazine, has written an important article about the number of funds needed for adequate diversification. These are excerpts:
"When you're building a portfolio for retirement -- or any other purpose, for that matter -- your goal shouldn't be to load up with as many different types of investments as you can (although you can certainly get that impression given the constant flow of new and often gimmicky funds and ETFs that financial services funds churn out)."

"I prefer the total stock market fund approach I described above rather than separate funds for large-, mid- and small-cap stocks because it keeps things simpler and requires less monitoring and managing of one's portfolio."

"If you start throwing yet more funds into your current mix, I'd say you run the risk of turning your portfolio into an unwieldy mishmash of overlapping holdings that don't work together as a coherent whole. In short, you stand a good chance of "di-worse-ifying" rather than diversifying."

"Your next step is to make sure that your stock and bond holdings generally reflect the makeup of the stock and bond market overall. For example, large-company stocks account for roughly 70% of total stock market value, while midcaps and small-caps represent about 20% and 10% respectively. Your holdings don't have to mirror these percentages exactly. But if you want a truly diversified portfolio with a risk profile largely in line with that of the market overall, then you don't want your portfolio's proportions to be too far off either."

"Don't assume that more is better when it comes to funds."
http://money.cnn.com/2017/06/28/retirem ... index.html

Best wishes.
Taylor
Great article! What I found most interesting is the author notes that a simple Two Fund Portfolio of Total Stock and Total Bond should work for most folks. If one is so inclined, the author recommends the Vanguard Four Fund Portfolio by adding Total International Stock and Total International Bond.

Thanks!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: The Three-Fund Portfolio

Post by abuss368 » Tue Jul 18, 2017 7:52 pm

Kennyt7 wrote:you need a small cap fund and an em fund
Hi Kennyt7 -

When an investor follows a strategy of total market index funds, one is essentially buying the haystack. All publicly traded companies are included. Vanguard provides just that: Total Stock and Bond funds for both U.S. and International at a very low cost.

More funds almost always results in more complexity.

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: The Three-Fund Portfolio

Post by gvsucavie03 » Tue Jul 18, 2017 9:24 pm

abuss368 wrote:
Kennyt7 wrote:you need a small cap fund and an em fund
Hi Kennyt7 -

When an investor follows a strategy of total market index funds, one is essentially buying the haystack. All publicly traded companies are included. Vanguard provides just that: Total Stock and Bond funds for both U.S. and International at a very low cost.

More funds almost always results in more complexity.

Best.
Wait, don't you tilt towards Reits? :wink:

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Re: The Three-Fund Portfolio

Post by abuss368 » Tue Jul 18, 2017 9:40 pm

gvsucavie03 wrote:
abuss368 wrote:
Kennyt7 wrote:you need a small cap fund and an em fund
Hi Kennyt7 -

When an investor follows a strategy of total market index funds, one is essentially buying the haystack. All publicly traded companies are included. Vanguard provides just that: Total Stock and Bond funds for both U.S. and International at a very low cost.

More funds almost always results in more complexity.

Best.
Wait, don't you tilt towards Reits? :wink:
Yes, however an investor does not have too! I have family members invested in Jack Bogle's Two Fund Portfolio and plan to stay the course.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: The Three-Fund Portfolio

Post by gvsucavie03 » Wed Jul 19, 2017 7:55 am

abuss368 wrote:
gvsucavie03 wrote:
abuss368 wrote:
Kennyt7 wrote:you need a small cap fund and an em fund
Hi Kennyt7 -

When an investor follows a strategy of total market index funds, one is essentially buying the haystack. All publicly traded companies are included. Vanguard provides just that: Total Stock and Bond funds for both U.S. and International at a very low cost.

More funds almost always results in more complexity.

Best.
Wait, don't you tilt towards Reits? :wink:
Yes, however an investor does not have too! I have family members invested in Jack Bogle's Two Fund Portfolio and plan to stay the course.
:happy

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Re: The Three-Fund Portfolio

Post by pascalwager » Fri Jul 21, 2017 3:19 pm

The two separate VG stock funds together do have more stocks than the VG total world stock fund, but in TWS "strategy and policy", there's a statement about possibly changing the benchmark to achieve a broader-based fund. This might increase the number of companies, bringing it closer to the two separate funds.

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Cost Basis Method

Post by newcomer2017 » Fri Jul 28, 2017 10:29 pm

Taylor,
As a newcomer and beginner in investment, I really like your three fund portfolio post. May I ask which cost basis method you applied for your account? Want to follow you exactly.
Thanks!

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Re: The Three-Fund Portfolio

Post by LadyGeek » Sat Jul 29, 2017 10:33 am

newcomer2017, Welcome! I merged your post into here so it will be seen by Taylor Larimore.

I would caution you on following someone's investing methods, as what applies to one person may not apply to another. You have also posted a follow-up question here: Cost Basis Method, which can be used to answer questions about your own situation.

The wiki has some background info: Cost basis methods
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Re: Cost Basis Methods?

Post by Taylor Larimore » Sat Jul 29, 2017 6:59 pm

newcomer2017 wrote:Taylor,
As a newcomer and beginner in investment, I really like your three fund portfolio post. May I ask which cost basis method you applied for your account? Want to follow you exactly.
Thanks!
newcomer 2017:

Welcome to the Bogleheads Forum!

A big mistake investors make is to mimic another investor who may have entirely different goals, risk-tolerance, time-frame and personal financial situation.

Nevertheless, to answer your question, I use the Average Cost Basis because I started with it long ago when it was the only IRS cost basis (I was aware of) and because it is the easiest. I've toyed with the idea of switching to the Specific Shares Identification method but never did. I really think this is a question for your accountant.

Our Wiki has a discussion of the various cost basis here: Cost Basis Methods.

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

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Re: Cost Basis Methods?

Post by newcomer2017 » Sat Jul 29, 2017 7:59 pm

Taylor,
Thank you very much and really appreciate you are willing to share your experience frankly! I will keep studying and gaining investment knowledge. During last a few I really learned a lot from your posts and Bogle's articles. with Best Wishes!

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"Two-Thirds of Stocks Underperformed the Broad Market Index Over Their Lifetime"

Post by Taylor Larimore » Mon Jul 31, 2017 4:06 pm

Bogleheads:

I thank Simplegift for this article confirming that "Two-Thirds of Stocks Underperformed the Broad Market":

Secret of the (Total Market) Index Fund’s Success

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

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Re: The Three-Fund Portfolio

Post by Leidsekade » Wed Aug 02, 2017 6:25 am

Some previous posts have covered this, but I wondered if anyone had further advice for non-US investors concerned about the currency risk of this approach.

This total stock market fund from Vanguard has c.20% invested in my domestic market, the UK: https://www.vanguardinvestor.co.uk/inve ... o-data-tab

Bearing in mind that the FTSE 100 earns c.70% of revenues overseas, the vast majority of the portfolio is highly exposed to FX.

At the same time, (the shambolic) Brexit negotiations make it riskier to increase UK exposure right now via FTSE 250 or UK small cap -- I realise that delaying investment would mean trying to time the markets, but this also seems like basic common sense.

Putting a large % into the UK feels like a high risk strategy that may or may not come off. Equally, having 90%+ of a portfolio directly exposed to foreign currencies also seems incredibly high risk. Would increasing UK exposure hedge my risk, or is there no correlation?

I don't feel that this approach is quite as suitable for non-US investors if I'm honest. However, as a complete novice, advice would be much appreciated. :happy

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"Warren Buffet Says 99% of Investors Should Net Even Try to Beat the Market"

Post by Taylor Larimore » Sun Aug 06, 2017 2:55 pm

Bogleheads:

Warren Buffet Says 99% of Investors Should Not Even Try to Beat the Market

Warren Buffet would like The Three-Fund Portfolio.

Best wishes
Taylor

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Re: The Three-Fund Portfolio

Post by LadyGeek » Thu Aug 10, 2017 3:48 pm

New member dn160 is requesting assistance with his/her portfolio, which I've moved into a new thread: The Three-Fund Portfolio [Portfolio help]
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Re: The Three-Fund Portfolio

Post by Cruncher » Wed Sep 13, 2017 11:31 pm

The Boglehead philosophy of investing will do much for my heirs.

Signed,

A 3-funder.

:beer

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Re: The Three-Fund Portfolio

Post by LadyGeek » Fri Sep 22, 2017 6:32 pm

HenrysPlan2 has a question on rebalancing his 3-fund portfolio, which I've moved into a stand-alone thread: [How do I rebalance my Three-Fund Portfolio?]
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Re: The Three-Fund Portfolio

Post by LadyGeek » Fri Sep 22, 2017 7:11 pm

New member PopMegaphone has a question which I've moved into a new thread. See: [Is company stock part of my 3-fund portfolio?]

FYI - The answers to both HenrysPlan2's and PopMegaphone's questions depend on their individual situations. The posts were moved into individual threads so we can focus on each one individually.
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Re: "Warren Buffet Says 99% of Investors Should Net Even Try to Beat the Market"

Post by abuss368 » Sat Sep 23, 2017 3:30 pm

Taylor Larimore wrote:
Sun Aug 06, 2017 2:55 pm
Bogleheads:

Warren Buffet Says 99% of Investors Should Not Even Try to Beat the Market

Warren Buffet would like The Three-Fund Portfolio.

Best wishes
Taylor

[Title fixed by admin LadyGeek]
Hi Taylor -

Indeed. Warren Buffett has recommended during many interviews on television that most investors should simply own "a few index funds". As such, I am sure he would not object to the Vanguard Total International Stock Index Fund as one of them when included with Total Stock Index Fund and Total Bond Index Fund. In recent years he has noted a two fund approach of the Vanguard S&P 500 (Why not Total Stock oh which Jack Bogle penned a letter to Mr. Buffett is a question) and Treasury Bonds.

Warren Buffett is very high on the United States of America. However, his company, Berkshire Hathaway, has invested in international markets.

In any event, I would expect the Three Fund Portfolio would meet his expectations and get his seal of approval!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: The Three-Fund Portfolio

Post by snarlyjack » Wed Sep 27, 2017 6:44 pm

Taylor,

I wanted to let you know that I converted my Roth IRA to
the 3 fund portfolio. I put it in the Life Strategy Fund
80/20 growth portfolio. Because of my age I felt the
80/20 fund would be best for me.

Thank you for all your help & contributions to Bogleheads.

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Re: The Three-Fund Portfolio

Post by abuss368 » Wed Sep 27, 2017 8:49 pm

snarlyjack wrote:
Wed Sep 27, 2017 6:44 pm
Taylor,

I wanted to let you know that I converted my Roth IRA to
the 3 fund portfolio. I put it in the Life Strategy Fund
80/20 growth portfolio. Because of my age I felt the
80/20 fund would be best for me.

Thank you for all your help & contributions to Bogleheads.
Hi snarlyjack -

An excellent strategy. The Vanguard LifeStrategy lineup provides a very low cost and diversified all in one fund. These funds are not the Three Fund Portfolio but rather include the recommended Vanguard Four Fund Portfolio of U.S. & International stocks and bonds. It won’t make much difference.

I like your approach.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: The Three-Fund Portfolio

Post by Taylor Larimore » Wed Sep 27, 2017 9:38 pm

snarlyjack wrote:
Wed Sep 27, 2017 6:44 pm
Taylor,

I wanted to let you know that I converted my Roth IRA to
the 3 fund portfolio. I put it in the Life Strategy Fund
80/20 growth portfolio. Because of my age I felt the
80/20 fund would be best for me.

Thank you for all your help & contributions to Bogleheads.
snarlyjack:

You are on the road to investment success.

Congratulations and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: The Three-Fund Portfolio

Post by bogglizer » Wed Sep 27, 2017 10:55 pm

LXEX55 wrote:
Sun Jun 18, 2017 5:33 am
May I ask what would be the suggested allocation of these three funds for a person who retires at age 63? Would you just do 33% each or go heavier on one fund?
I balance to 33% each. Not because that ratio is better than any other, but because it is easy to rebalance. Every quarter I average the highest and lowest fund.

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Re: The 3-Fund Portfolio and Mr. Bogle's crusade

Post by dn160 » Thu Sep 28, 2017 3:19 pm

Taylor Larimore wrote:
Tue Aug 07, 2012 7:23 pm
Sunny Sarkar wrote:Here is a link to Taylor's original post from 1999 on this topic in the old M* forum...

Which is better--15 funds or 4?

All the best,
Sunny
Hi Sunny:

Thank you for the link to my original post recommending the 3-fund portfolio (plus a money market fund). It is gratifying for me to see how well that post has stood the test of time. Vanguard has recognized its merits by adopting it for their Target and Life Strategy Funds.

I made more than 25,000 posts on the old Morningstar Vanguard Diehard forum trying to help investors. I hope I live long enough to do the same here. It is immensely satisfying to be a soldier in Mr. Bogle's crusade "to give ordinary investors a fair shake."

Best wishes.
Taylor
I stumbled upon this. You have done it sir.

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Re: The Three-Fund Portfolio

Post by LadyGeek » Thu Oct 05, 2017 3:25 pm

New member bluerafters has a question which I've moved into a stand-alone thread. See: [Where do I invest my 2018 IRA contributions?]
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Re: The Three-Fund Portfolio

Post by LadyGeek » Sat Oct 07, 2017 6:57 pm

New member about10 has a question which I've moved into a stand-alone thread. See: [Three-fund portfolio: Robo-adviser or 3 funds?]
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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