Jack Bogle - Two Fund Portfolio

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KJVanguard
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Re: Jack Bogle - Two Fund Portfolio

Post by KJVanguard » Sat Jan 05, 2019 6:21 pm

Portfolio Watch tells me that I am 55% international (of my equity holdings). And a lot of my international is small cap, EM, and EM small cap dividend (DGS). Also own an International Real Estate Index.

So I seem to have a few more funds and lots of that nasty foreign stuff that Bogle tells me I should avoid. Ironic a man who thinks you should own a cap weighting of every stock & every (US) bond, doesn't think cap weighting applies to anything outside the US. Bogle would urge diversification as you don't want to put all your eggs in one basket, unless that basket happened to be the US stock market in which case all eggs in one basket is called the prudent move.

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JoMoney
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Re: Jack Bogle - Two Fund Portfolio

Post by JoMoney » Sat Jan 05, 2019 8:30 pm

Ferdinand2014 wrote:
Sat Jan 05, 2019 6:09 pm
JoMoney wrote:
Fri Apr 01, 2016 8:57 pm
I follow Buffett's advice of keeping enough in cash (including short-term low risk bonds) that I feel comfortable and putting the rest in a low-cost S&P500 fund.

+1
Has this been a long term allocation? Are you in or close to retirement? Did you ever hold international? How much cash/short term bonds do you keep as a percent of your allocation? I have been debating a similar strategy. Right now I have 80% equity (80% FSKAX(TSM)/20% FSPSX(EAFE) and 20% pure treasury money market (FDLXX). I've debated going S&P 500, no international and rest short term treasury. I love the simplicity and think Buffet knows what he's talking about. I have shunned EM and corporate bonds very much intentionally for many reasons. Thinking is S&P 500 gives more large cap tilt and international footprint as a percent relative to TSM. Therefore skipping international seems more plausible. I am sure many would disagree. I get it. I however am trying to come up with an investment plan I feel I will be able to stick with. Just curious as to your input. Thanks!
My workplace 401k has been in a S&P 500 index since about 2003. My taxable account was individual stocks from the late 1990's until 2008, when I stopped trying to pretend I could pick stocks and really started listening to the advice Warren Buffett was offering. When I was stocking picking I did hold some large non-U.S. stocks, and I did own a small amount of the 'Total World ETF' (VT) for awhile, but not since 2008-2010 when I had moved completely out of my old ways. Other than VT, which was only a very small amount, I've never held Emerging Markets (they would never pass the sleep well at night test for me). I'm several decades away from typical retirement age, when or if I'll ever retire is a question I ask myself a lot. I've got a decent sized nest egg saved up, but I don't mind my job. My current allocation is roughly 95/5, mostly using Series I Savings Bonds and Money Market. I never followed a constant-mix allocation/rebalancing allocation in the past. It was just keeping a rough amount of money in cash that I felt comfortable, which is currently well over a years worth of expenses. I had been working towards getting that up to 90/10 with new contributions, but the recent dip has caused me to revert back to putting new money back stocks. I keep telling myself I want to get to 90/10 so I have an actual allocation, but it actually bothers me more keeping that much around in cash/bonds at such low interest rates while I have a stable good paying job.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

KJVanguard
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Re: Jack Bogle - Two Fund Portfolio

Post by KJVanguard » Sat Jan 05, 2019 8:34 pm

JoMoney wrote:
Sat Jan 05, 2019 8:30 pm
...I've never held Emerging Markets (they would never pass the sleep well at night test for me).
I think we have just identified a new sleep disorder. :D

I'd say get a sleeping pill and invest in the entire world.

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JoMoney
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Re: Jack Bogle - Two Fund Portfolio

Post by JoMoney » Sat Jan 05, 2019 8:39 pm

KJVanguard wrote:
Sat Jan 05, 2019 8:34 pm
JoMoney wrote:
Sat Jan 05, 2019 8:30 pm
...I've never held Emerging Markets (they would never pass the sleep well at night test for me).
I think we have just identified a new sleep disorder. :D

I'd say get a sleeping pill and invest in the entire world.
Taking drugs to sleep would bother me even more than buying whatever it is people think they're getting when they buy 'Emerging Market' stocks.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Ferdinand2014
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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 » Sat Jan 05, 2019 9:19 pm

JoMoney wrote:
Sat Jan 05, 2019 8:30 pm
Ferdinand2014 wrote:
Sat Jan 05, 2019 6:09 pm
JoMoney wrote:
Fri Apr 01, 2016 8:57 pm
I follow Buffett's advice of keeping enough in cash (including short-term low risk bonds) that I feel comfortable and putting the rest in a low-cost S&P500 fund.

+1
Has this been a long term allocation? Are you in or close to retirement? Did you ever hold international? How much cash/short term bonds do you keep as a percent of your allocation? I have been debating a similar strategy. Right now I have 80% equity (80% FSKAX(TSM)/20% FSPSX(EAFE) and 20% pure treasury money market (FDLXX). I've debated going S&P 500, no international and rest short term treasury. I love the simplicity and think Buffet knows what he's talking about. I have shunned EM and corporate bonds very much intentionally for many reasons. Thinking is S&P 500 gives more large cap tilt and international footprint as a percent relative to TSM. Therefore skipping international seems more plausible. I am sure many would disagree. I get it. I however am trying to come up with an investment plan I feel I will be able to stick with. Just curious as to your input. Thanks!
My workplace 401k has been in a S&P 500 index since about 2003. My taxable account was individual stocks from the late 1990's until 2008, when I stopped trying to pretend I could pick stocks and really started listening to the advice Warren Buffett was offering. When I was stocking picking I did hold some large non-U.S. stocks, and I did own a small amount of the 'Total World ETF' (VT) for awhile, but not since 2008-2010 when I had moved completely out of my old ways. Other than VT, which was only a very small amount, I've never held Emerging Markets (they would never pass the sleep well at night test for me). I'm several decades away from typical retirement age, when or if I'll ever retire is a question I ask myself a lot. I've got a decent sized nest egg saved up, but I don't mind my job. My current allocation is roughly 95/5, mostly using Series I Savings Bonds and Money Market. I never followed a constant-mix allocation/rebalancing allocation in the past. It was just keeping a rough amount of money in cash that I felt comfortable, which is currently well over a years worth of expenses. I had been working towards getting that up to 90/10 with new contributions, but the recent dip has caused me to revert back to putting new money back stocks. I keep telling myself I want to get to 90/10 so I have an actual allocation, but it actually bothers me more keeping that much around in cash/bonds at such low interest rates while I have a stable good paying job.
Thanks! :sharebeer
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

lutok
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Re: Jack Bogle - Two Fund Portfolio

Post by lutok » Sat Jan 05, 2019 9:27 pm

I am retired and at a 50/50 allocation. In spirit it is a two fund portfolio, though I have juiced the bond portion with 25% VCIT, the rest BND. The stock portion is VTI.

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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey » Sat Jan 05, 2019 11:03 pm

bikechuck wrote:
Wed Aug 15, 2018 1:14 pm
oldzey wrote:
Wed Aug 02, 2017 12:24 am
Affirmative - I use two funds:

Total U.S. Stock Market Index Fund
TIAA Traditional
Will you consider annuitizing the TIAA Traditional at some future date? I have it as well but do not own enough of it to fill my bond space. I might annuitize it in my 70s if for no other reason than to make things dirt simple for my wife after I die as I have been unable to get her to take an interest in our portfolio.
Yes, I plan to annuitize part of it, in addition to considering other payout options as detailed here: https://www.tiaa.org/public/pdf/rev_inc_opt1.pdf
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Thu Aug 01, 2019 8:47 pm

With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

columbia
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Re: Jack Bogle - Two Fund Portfolio

Post by columbia » Thu Aug 01, 2019 9:05 pm

abuss368 wrote:
Thu Aug 01, 2019 8:47 pm
With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
Pick a stock fund, pick a bond bond.

Ignore the demagogues.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Sandtrap
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Re: Jack Bogle - Two Fund Portfolio

Post by Sandtrap » Thu Aug 01, 2019 9:09 pm

columbia wrote:
Thu Aug 01, 2019 9:05 pm
abuss368 wrote:
Thu Aug 01, 2019 8:47 pm
With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
Pick a stock fund, pick a bond bond.

Ignore the demagogues.
How about a hybrid 2 fund portfolio for the "tilt and factor" folks?

Pick "some" stock funds, pick "some" bond funds. :shock:

j
Last edited by Sandtrap on Thu Aug 01, 2019 9:57 pm, edited 1 time in total.
Wiki Bogleheads Wiki: Everything You Need to Know

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Thu Aug 01, 2019 9:42 pm

columbia wrote:
Thu Aug 01, 2019 9:05 pm
abuss368 wrote:
Thu Aug 01, 2019 8:47 pm
With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
Pick a stock fund, pick a bond bond.

Ignore the demagogues.
Do you invest in the Two Fund Portfolio?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

Ferdinand2014
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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 » Thu Aug 01, 2019 9:56 pm

oldcomputerguy wrote:
Sat Apr 02, 2016 8:49 am
Quark wrote: Bogle has recently (i.e., after the date of his book) been saying that Total Bond Market is too heavily invested in government bonds.
I find it interesting looking at the disparity of alleged "total" bond funds. In particular, Vanguard Total Bond Fund (VBTLX) consists of 43.5% Treasury/Agency bonds and 20.5% Mortgage-backed, for a total of approximately 64% government issue (almost half again that of the Barkley's Aggregate Index). On the other hand, Fidelity Total Bond Fund (FTBFX) has a huge concentration in corporate bonds (approximately 50%), twice the percentage contained in the Barkley's Aggregate index, and 20% government issues, half the percentage of the Index; and Fidelity U.S. Bond Index (FSITX), which is not titled as a "total" bond fund, tracks the Barkley's Aggregate Index very closely.

I guess it goes to show that you really have to pay attention to what you're actually buying.
FSITX is now rolled into one low fee class of FXNAX at 0.025 ER.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 » Thu Aug 01, 2019 10:04 pm

I keep a 2 fund portfolio.

My IPS:

1.) Enough cash to sleep well
2.) Everything else into the lowest cost S&P 500 index fund available

My cash is treasury only money market funds and T-bills.

The cash is my emergency fund, future lumpy expense fund and my keep me from ever selling my S&P 500 fund all in one. It’s not a percent, but an X amount that when I go to bed and say the X number in my head and say yep, that seems good.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Fri Aug 02, 2019 10:06 pm

Ferdinand2014 wrote:
Thu Aug 01, 2019 10:04 pm
I keep a 2 fund portfolio.

My IPS:

1.) Enough cash to sleep well
2.) Everything else into the lowest cost S&P 500 index fund available

My cash is treasury only money market funds and T-bills.

The cash is my emergency fund, future lumpy expense fund and my keep me from ever selling my S&P 500 fund all in one. It’s not a percent, but an X amount that when I go to bed and say the X number in my head and say yep, that seems good.
Simple and effective.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sat Aug 03, 2019 12:51 pm

columbia wrote:
Thu Aug 01, 2019 9:05 pm
abuss368 wrote:
Thu Aug 01, 2019 8:47 pm
With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
Pick a stock fund, pick a bond bond.

Ignore the demagogues.
Simplicity!
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Taylor Larimore
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Re: Jack Bogle - Two Fund Portfolio

Post by Taylor Larimore » Sat Aug 03, 2019 1:09 pm

Bogleheads:

We came to Vanguard in 1986 where we soon owned 15 funds for "diversification" ?

Today, I own Vanguard Total Bond Market and 500 Index Fund.

If I could start over I would own The Three-Fund Portfolio
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk." -- "The odds of outpacing an all-market index fund are, well, terrible."
Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog » Sat Aug 03, 2019 2:32 pm

VT+BNDW and chill. Works for me...

:sharebeer
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Re: Jack Bogle - Two Fund Portfolio

Post by ThePrince » Sat Aug 03, 2019 4:32 pm

lostdog wrote:
Sat Aug 03, 2019 2:32 pm
VT+BNDW and chill. Works for me...

:sharebeer
Ditto.

columbia
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Re: Jack Bogle - Two Fund Portfolio

Post by columbia » Sat Aug 03, 2019 4:44 pm

abuss368 wrote:
Sat Aug 03, 2019 12:51 pm
columbia wrote:
Thu Aug 01, 2019 9:05 pm
abuss368 wrote:
Thu Aug 01, 2019 8:47 pm
With international investments performing below U.S. for a while it appears that more and more Two Fund Portfolio posts are appearing.

In my opinion this is an excellent strategy.
Pick a stock fund, pick a bond bond.

Ignore the demagogues.
Simplicity!

Yes, I finally achieved it myself. It’s great. 😀
If you leave your head in the sand for too long, you might get run over by a Jeep.

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abuss368
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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sat Aug 03, 2019 7:57 pm

Taylor Larimore wrote:
Sat Aug 03, 2019 1:09 pm
Bogleheads:

We came to Vanguard in 1986 where we soon owned 15 funds for "diversification" ?

Today, I own Vanguard Total Bond Market and 500 Index Fund.

If I could start over I would own The Three-Fund Portfolio
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk." -- "The odds of outpacing an all-market index fund are, well, terrible."
Best wishes
Taylor
That is incredible in terms of 15 funds and we and my parents initially did the same thing. Now we simply pick a few Index funds.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by Artsdoctor » Sat Aug 03, 2019 8:29 pm

abuss368 wrote:
Fri Apr 01, 2016 8:44 pm
Bogleheads,

Jack Bogle often recommends a simple investment portfolio of Total Stock and Total Bond. He has also recommended a simple Balanced Index fund. I have family that invest in the simple two fund portfolio that Jack recommends and are very satisfied with the simplicity and investment results. Warren Buffett also recommends a simple two fund portfolio.

How many Bogleheads invest in the Jack Bogle Two Fund Portfolio?

The older I get, the more I wonder!
There is a good give-and-take on another thread regarding this very topic:

viewtopic.php?f=10&t=286757

If an investor is going to ignore international diversification, I would argue that that's perfectly fine and acceptable as long as they're honest with exactly why they're doing it. It's obvious to me that these threads regarding "international diversification" really come down to a very simple fork in the road: do you design your portfolio because someone tells you to do it a certain way or do you understand the reasoning behind your decision. It's a worldview and there's plenty of room for us all.

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Re: Jack Bogle - Two Fund Portfolio

Post by fortyofforty » Sun Aug 04, 2019 7:45 am

abuss368 wrote:
Sat Aug 03, 2019 7:57 pm
Taylor Larimore wrote:
Sat Aug 03, 2019 1:09 pm
Bogleheads:

We came to Vanguard in 1986 where we soon owned 15 funds for "diversification" ?

Today, I own Vanguard Total Bond Market and 500 Index Fund.

If I could start over I would own The Three-Fund Portfolio
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk." -- "The odds of outpacing an all-market index fund are, well, terrible."
Best wishes
Taylor
That is incredible in terms of 15 funds and we and my parents initially did the same thing. Now we simply pick a few Index funds.
I would guess that many of us who started with Vanguard around then ended up with too many funds (most actively managed), with various fund companies (of which Vanguard was but one), all in the interest of "diversification". Although Jack was writing and speaking even then about index funds and simplicity, it took me a long while to absorb and apply what he was teaching. The weight of the entire financial industry was arrayed against him and his ideas, from magazines to television shows, newsletters to periodicals, all hyping "5 Funds to Own for the Long Term" or "Tech Funds to Buy Right Now". Lucky for us, math was on Jack's side, and he was stubborn as hell.
Indexing works, not because of magic, but because of math. | Diligentia. Vis. Celeritas. - Jeff Cooper | Out of self-quarantine.

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Wed Nov 13, 2019 7:35 pm

Bogleheads -

Would like some updated comments. How many follow and invest in Mr. Bogle’s Two Fund Portfolio and have passed on international stocks, international bonds, REITs, and other funds?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by galawdawg » Wed Nov 13, 2019 7:58 pm

I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Wed Nov 13, 2019 8:07 pm

galawdawg wrote:
Wed Nov 13, 2019 7:58 pm
I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).
How has that worked for you? Any regrets on not having all the complexity?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by tomd37 » Wed Nov 13, 2019 8:09 pm

At age 82 with a 40/60 asset allocation and no real desire to own international funds, I see no real impact on my portfolio even if I did select a 20% allocation to international. 20% of 40% at this stage of life does not get my juices running again. I'm sticking with Total Stock and Total Bond Market Indexes (VTSAX and VBTLX). Easy to handle now and for my spouse after I'm gone.
Tom D.

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Re: Jack Bogle - Two Fund Portfolio

Post by FrugalInvestor » Wed Nov 13, 2019 8:21 pm

I was a 3-funder at one time but have slowly liquidated my international fund and am now a 2-funder, VBTLX in tax advantaged accounts and VTSAX in taxable (roughly 50/50).

The transition to 3-fund occurred shortly following (early) retirement and then I gradually transitioned to 2-fund with the proceeds of those sales funding annual spending needs. I've been extremely pleased with the simplicity as well as the expense and tax efficiency of this approach. I don't foresee making any further changes to my investments other than withdrawing as necessary throughout retirement.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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Re: Jack Bogle - Two Fund Portfolio

Post by helloeveryone » Wed Nov 13, 2019 8:24 pm

galawdawg wrote:
Wed Nov 13, 2019 7:58 pm
I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).
Did you stay put through the recessions? (I only experienced the 2008-2009 one but as a new worker investing in the recession)

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Re: Jack Bogle - Two Fund Portfolio

Post by galawdawg » Wed Nov 13, 2019 8:30 pm

abuss368 wrote:
Wed Nov 13, 2019 8:07 pm
galawdawg wrote:
Wed Nov 13, 2019 7:58 pm
I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).
How has that worked for you? Any regrets on not having all the complexity?
No regrets. DW and I heard Jack speak at an event in Atlanta soon after we married. He stuck around afterwards and we were able to meet him and talk to him personally about investing. We decided then to buy the entire US market as inexpensively as possible and hold it forever. That's what we've done for nearly thirty years. Retired last year at 53 and was grateful to be able to personally thank Jack at last year's BH Conference, held the week after my retirement.
:sharebeer

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Re: Jack Bogle - Two Fund Portfolio

Post by galawdawg » Wed Nov 13, 2019 8:38 pm

helloeveryone wrote:
Wed Nov 13, 2019 8:24 pm
galawdawg wrote:
Wed Nov 13, 2019 7:58 pm
I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).
Did you stay put through the recessions? (I only experienced the 2008-2009 one but as a new worker investing in the recession)
Not only did I not sell, but I channeled some discretionary spending money into more VTSAX. I figured since it was "on sale", why not buy more!

But to be completely transparent, I had good job security and anticipated a decent pension so I was prepared to perhaps work a few more years if necessary. That increased my tolerance for risk.

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Wed Nov 13, 2019 9:03 pm

galawdawg wrote:
Wed Nov 13, 2019 8:30 pm
abuss368 wrote:
Wed Nov 13, 2019 8:07 pm
galawdawg wrote:
Wed Nov 13, 2019 7:58 pm
I was in a "one fund" portfolio from early 1990's until a few months before retirement when I moved 20% to VBTLX, so now I'm in a two fund portfolio (80/20 in VTSAX/VBTLX).
How has that worked for you? Any regrets on not having all the complexity?
No regrets. DW and I heard Jack speak at an event in Atlanta soon after we married. He stuck around afterwards and we were able to meet him and talk to him personally about investing. We decided then to buy the entire US market as inexpensively as possible and hold it forever. That's what we've done for nearly thirty years. Retired last year at 53 and was grateful to be able to personally thank Jack at last year's BH Conference, held the week after my retirement.
:sharebeer
That is so awesome and rewarding. Do you hold these funds in both taxable and tax advantaged accounts? If taxable how do you spend the dividends or do you follow a total return strategy.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by galawdawg » Wed Nov 13, 2019 10:52 pm

Tax-deferred has VTSAX and VBTLX. Taxable is all VTSAX. Overall allocation is 80/20 and when I need to rebalance, I do so in the tax-deferred accounts. I reinvest dividends in the tax-deferred. Prior to retirement I reinvested dividends in taxable as well, now they go into Vanguard Federal Money Market for travel or other discretionary spending not covered by my pension.

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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey » Thu Nov 14, 2019 12:26 am

oldzey wrote:
Sun Nov 04, 2018 11:32 pm
oldzey wrote:
Wed Aug 02, 2017 12:24 am
Affirmative - I use two funds:

Total U.S. Stock Market Index Fund
TIAA Traditional
Still staying the course with these two funds. :beer
I'm back to three funds, having added VIMAX (aka Mel's Unloved Mid-Caps) as the 3rd fund.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Thu Nov 14, 2019 7:15 pm

Excellent updated thoughts.

Thanks Bogleheads!
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by Taylor Larimore » Thu Nov 14, 2019 9:11 pm

Bogleheads:

When I was writing The Bogleheads' Guide to the Three-Fund Portfolio, I asked Mr. Bogle if he would write the Forward. He immediately replied "of course." I was thrilled.

I sent Jack an advance copy of the book which included my recommendation for an international fund. He called me back to say an international fund was not necessary. It was a dilemma for me because I personally believe international stocks add important diversification.

I settled by recommending that international stocks should be 20% of equity (Jack's recommendation: "if you must").

Best wishes.
Taylor
Jack Bogle's Words of Wisdom from his Forward in The Bogleheads' Three-Fund Portfolio: "Since 1994 (when Jack wrote his first book suggesting international stocks are unnecessary) the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of non-U.S. stocks rose by 237%."
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sat Nov 16, 2019 3:51 pm

Taylor Larimore wrote:
Thu Nov 14, 2019 9:11 pm
Bogleheads:

When I was writing The Bogleheads' Guide to the Three-Fund Portfolio, I asked Mr. Bogle if he would write the Forward. He immediately replied "of course." I was thrilled.

I sent Jack an advance copy of the book which included my recommendation for an international fund. He called me back to say an international fund was not necessary. It was a dilemma for me because I personally believe international stocks add important diversification.

I settled by recommending that international stocks should be 20% of equity (Jack's recommendation: "if you must").

Best wishes.
Taylor
Jack Bogle's Words of Wisdom from his Forward in The Bogleheads' Three-Fund Portfolio: "Since 1994 (when Jack wrote his first book suggesting international stocks are unnecessary) the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of non-U.S. stocks rose by 237%."
Thanks Taylor. I have learned so much from Jack Bogle.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by bjf412 » Sat Nov 16, 2019 4:51 pm

Wife and I are 100% VTSAX. Will intro a total bond index when approaching retirement in 11 years - will go 75/25 then & keep it at a two-fund portfolio. I will have a generous publicly-funded pension, which allows for the aggressive AA. I’m very happy with the simplicity and the performance.

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sun Nov 17, 2019 10:57 am

Dandy wrote:
Thu Aug 16, 2018 6:26 am
It seems strange to me that people admire Buffet's 90/10 retiree allocation. Many wouldn't recommend that for a person in the early accumulation stage. Buffet is a great investor but he doesn't invest a la a Boglehead. He is a value investor aka market timer that is sitting on 111 billion waiting for deep value before jumping in and buying whole companies or lending to companies at high risk for a sweet interest rate. He is an optimist and a great believer in the US equity market.

I tip my hat to him but wouldn't be signing on to his retiree asset allocation suggestions. You need to consider your asset level, income, expenses, risk tolerance, amount of human capital, diversity,etc. and formulate your own allocation. I really doubt that doing that will result in anything like a 90/10 allocation if you are near or in retirement.

Also the quest for simplicity is a good thing but care must be taken when making trade offs between simplicity and other factors like diversity. I think a TD or Life Strategy Fund is probably a better choice than a Balanced Index only or the suggested 2 fund portfolio. I think that some of the problems people feel about having a handful of funds is that they are overly focused on rebalancing. To me, in most cases, keeping the overall equity/fixed income allocation within say a 5% band is pretty much all that is needed.
My take away from Warren Buffett’s recommendation (which is nearly identical to Mr. Bogle): two funds, stock and bond, no international, and simplicity, is more important than the actual 90/10 allocation.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by oldzey » Sun Nov 17, 2019 12:27 pm

abuss368 wrote:
Sun Nov 17, 2019 10:57 am
Dandy wrote:
Thu Aug 16, 2018 6:26 am
It seems strange to me that people admire Buffet's 90/10 retiree allocation. Many wouldn't recommend that for a person in the early accumulation stage. Buffet is a great investor but he doesn't invest a la a Boglehead. He is a value investor aka market timer that is sitting on 111 billion waiting for deep value before jumping in and buying whole companies or lending to companies at high risk for a sweet interest rate. He is an optimist and a great believer in the US equity market.

I tip my hat to him but wouldn't be signing on to his retiree asset allocation suggestions. You need to consider your asset level, income, expenses, risk tolerance, amount of human capital, diversity,etc. and formulate your own allocation. I really doubt that doing that will result in anything like a 90/10 allocation if you are near or in retirement.

Also the quest for simplicity is a good thing but care must be taken when making trade offs between simplicity and other factors like diversity. I think a TD or Life Strategy Fund is probably a better choice than a Balanced Index only or the suggested 2 fund portfolio. I think that some of the problems people feel about having a handful of funds is that they are overly focused on rebalancing. To me, in most cases, keeping the overall equity/fixed income allocation within say a 5% band is pretty much all that is needed.
My take away from Warren Buffett’s recommendation (which is nearly identical to Mr. Bogle): two funds, stock and bond, no international, and simplicity, is more important than the actual 90/10 allocation.
Well put - the 90/10 recommendation was germane to Mr. Buffett's own financial situation and not most investors.

One should take into account that Mr. Buffett has pledged to give away at least 99% of his ~$82B fortune. That would leave his heirs $820M (1%), split between 90% equities ($738M), and 10% bonds ($82M). One could argue that for most people, the $82M alone would be more than enough to live on.
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Sun Nov 17, 2019 4:08 pm

As I look back over the past decade (and longer) the returns for international are much less than domestic. A Two Fund Portfolio would have provided a much better result with much less complexity.

The quote Taylor provided from Mr. Bogle above noting the returns of domestic and international since 1994 is incredible.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 » Sun Nov 17, 2019 10:57 pm

abuss368 wrote:
Sun Nov 17, 2019 10:57 am
Dandy wrote:
Thu Aug 16, 2018 6:26 am
It seems strange to me that people admire Buffet's 90/10 retiree allocation. Many wouldn't recommend that for a person in the early accumulation stage. Buffet is a great investor but he doesn't invest a la a Boglehead. He is a value investor aka market timer that is sitting on 111 billion waiting for deep value before jumping in and buying whole companies or lending to companies at high risk for a sweet interest rate. He is an optimist and a great believer in the US equity market.

I tip my hat to him but wouldn't be signing on to his retiree asset allocation suggestions. You need to consider your asset level, income, expenses, risk tolerance, amount of human capital, diversity,etc. and formulate your own allocation. I really doubt that doing that will result in anything like a 90/10 allocation if you are near or in retirement.

Also the quest for simplicity is a good thing but care must be taken when making trade offs between simplicity and other factors like diversity. I think a TD or Life Strategy Fund is probably a better choice than a Balanced Index only or the suggested 2 fund portfolio. I think that some of the problems people feel about having a handful of funds is that they are overly focused on rebalancing. To me, in most cases, keeping the overall equity/fixed income allocation within say a 5% band is pretty much all that is needed.
My take away from Warren Buffett’s recommendation (which is nearly identical to Mr. Bogle): two funds, stock and bond, no international, and simplicity, is more important than the actual 90/10 allocation.
He has made it clear on a number of occasions that the amount of fixed income - he recommends short term U.S. treasuries, should be enough to ‘sleep well’. The exact percentage is not important as much as enough to not sell equities because you have to, but rather when you want to.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Tue Nov 19, 2019 7:51 pm

Bogleheads -

Jack Bogle wrote in his Little Book of Common Sense investing:
"Deep down, I remain absolutely confident that the vast majority of American families will be well served by owning their equity holding in an all-U.S. stock market index portfolio and holding their bonds in an all-U.S. bond-market index portfolio."
And:
"Simplicity is the master key to financial success."
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog » Tue Nov 19, 2019 8:20 pm

Vanguard's two fund of VT and BNDW. Simple and diversified.

Jack's two fund portfolio, simple and undiversified.
Global Market Cap Equity | 6 Months Cash | Staying The Course

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Re: Jack Bogle - Two Fund Portfolio

Post by yogesh » Tue Nov 19, 2019 8:32 pm

I couldn't sleep through 2008 so resorted to balanced funds which rebalance automatically and hide some of the volatility.
2 funds for me!

Taxable: VTMFX (Tax Managed Balanced)
401K: VFORX (Retirement Index 2040)
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Tue Nov 19, 2019 8:34 pm

lostdog wrote:
Tue Nov 19, 2019 8:20 pm
Vanguard's two fund of VT and BNDW. Simple and diversified.

Jack's two fund portfolio, simple and undiversified.
Is that international bond or global bond? I am not familiar with the ticker symbols.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Tue Nov 19, 2019 8:36 pm

yogesh wrote:
Tue Nov 19, 2019 8:32 pm
I couldn't sleep through 2008 so resorted to balanced funds which rebalance automatically and hide some of the volatility.
2 funds for me!

Taxable: VTMFX (Tax Managed Balanced)
401K: VFORX (Retirement Index 2040)
So international is only in Retirement Index or US only?
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by yogesh » Tue Nov 19, 2019 8:44 pm

abuss368 wrote:
Tue Nov 19, 2019 8:36 pm
yogesh wrote:
Tue Nov 19, 2019 8:32 pm
I couldn't sleep through 2008 so resorted to balanced funds which rebalance automatically and hide some of the volatility.
2 funds for me!

Taxable: VTMFX (Tax Managed Balanced. 50% Domestic Stocks, 50% Municipal Bonds)
401-K: VFORX (Retirement Index 2040. 50% Domestic Stocks, 33% International Stocks, 12% Domestic Bonds, 5% International Bonds )
So international is only in Retirement Index or US only?
Yes only in Retirement Index. Updated with the following:

Taxable: VTMFX (Tax Managed Balanced. 50% Domestic Stocks, 50% Municipal Bonds)
401-K: VFORX (Retirement Index 2040. 50% Domestic Stocks, 33% International Stocks, 12% Domestic Bonds, 5% International Bonds )
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

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Re: Jack Bogle - Two Fund Portfolio

Post by lostdog » Tue Nov 19, 2019 9:04 pm

abuss368 wrote:
Tue Nov 19, 2019 8:34 pm
lostdog wrote:
Tue Nov 19, 2019 8:20 pm
Vanguard's two fund of VT and BNDW. Simple and diversified.

Jack's two fund portfolio, simple and undiversified.
Is that international bond or global bond? I am not familiar with the ticker symbols.
VT-Vanguard Total World Stock Index
BNDW-Vanguard Total World Bond Index
Global Market Cap Equity | 6 Months Cash | Staying The Course

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Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 » Wed Nov 20, 2019 7:26 pm

lostdog wrote:
Tue Nov 19, 2019 9:04 pm
VT-Vanguard Total World Stock Index
BNDW-Vanguard Total World Bond Index
Interesting - A two fund global portfolio.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Jack Bogle - Two Fund Portfolio

Post by xxd091 » Thu Nov 21, 2019 4:15 am

UK investor .Aged 73 -16 years retd
Been 2 funds for for many years now
Gives me the exposure to the US that a U.K. investor requires
Made my pile so 30 %Equities -70 %Bonds does it for me
The Jack Bogle way!
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