The Three-Fund Portfolio

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ruralavalon
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Re: The Three-Fund Portfolio

Post by ruralavalon » Sat Aug 01, 2020 9:54 am

JBTX wrote:
Fri Jul 31, 2020 8:21 pm
Sorry if this was addressed somewhere in the last 2896 pages.

Why wouldn't either a life strategy fund, or some combination of life strategy and vanguard balanced be easier to implement? You could use those two funds to come up with an international allocation that better suits your taste if the life strategy international allocation is deemed too offensive.

Yes, there will be a modest fee differential, and less ability manage taxable outcomes, but to me those impacts seem fairly immaterial.
Balanced funds can be an issue for tax-efficiency for anyone with a taxable brokerage account. Also Vanguard LifeStrategy funds are not often found in 401k plans.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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abuss368
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Re: The Three-Fund Portfolio

Post by abuss368 » Sat Aug 01, 2020 9:56 am

Lifestrategy and Target funds are excellent choices. I believe Taylor supports these funds when someone has a tax advantage account only.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

tj
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Re: The Three-Fund Portfolio

Post by tj » Sat Aug 01, 2020 8:32 pm

JBTX wrote:
Fri Jul 31, 2020 8:21 pm
Sorry if this was addressed somewhere in the last 2896 pages.

Why wouldn't either a life strategy fund, or some combination of life strategy and vanguard balanced be easier to implement? You could use those two funds to come up with an international allocation that better suits your taste if the life strategy international allocation is deemed too offensive.

Yes, there will be a modest fee differential, and less ability manage taxable outcomes, but to me those impacts seem fairly immaterial.
They would be if you followed this model:

viewtopic.php?f=10&t=287967

JBTX
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Re: The Three-Fund Portfolio

Post by JBTX » Sat Aug 01, 2020 8:37 pm

abuss368 wrote:
Sat Aug 01, 2020 9:56 am
Lifestrategy and Target funds are excellent choices. I believe Taylor supports these funds when someone has a tax advantage account only.
With interest rates near zero and the modest differential in income and cap gains rates the tax impact seems negligible.

Element
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Re: The Three-Fund Portfolio

Post by Element » Tue Aug 04, 2020 8:58 pm

My 401k has the 500 fund VFIAX as an option but no VTSAX. Would it be of any benefit to add Vanguard Midcap VMGMX to my portfolio? Currently my 3 fund consists of 60% VFIAX, 20% VTIAX, and 20%VBILX (Intermediate term bond fund). Would it make any difference for me to change the VFIAX to 50% and add VMGMX at 10%?

tj
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Re: The Three-Fund Portfolio

Post by tj » Tue Aug 04, 2020 10:13 pm

Element wrote:
Tue Aug 04, 2020 8:58 pm
My 401k has the 500 fund VFIAX as an option but no VTSAX. Would it be of any benefit to add Vanguard Midcap VMGMX to my portfolio? Currently my 3 fund consists of 60% VFIAX, 20% VTIAX, and 20%VBILX (Intermediate term bond fund). Would it make any difference for me to change the VFIAX to 50% and add VMGMX at 10%?
500 Index is good enough.

Rustum
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Re: The Three-Fund Portfolio

Post by Rustum » Wed Aug 05, 2020 12:31 am

I have small amount in Fidelity HSA and Roth IRA accounts. What is the stable fund to invest in. I have invested it in FNBGX recently. Not sure if it is a good fund for long term.

Windstone
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Re: The Three-Fund Portfolio

Post by Windstone » Wed Aug 05, 2020 3:23 am

hi, it's interesting

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ruralavalon
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Re: The Three-Fund Portfolio

Post by ruralavalon » Wed Aug 05, 2020 8:29 am

Element wrote:
Tue Aug 04, 2020 8:58 pm
My 401k has the 500 fund VFIAX as an option but no VTSAX. Would it be of any benefit to add Vanguard Midcap VMGMX to my portfolio? Currently my 3 fund consists of 60% VFIAX, 20% VTIAX, and 20%VBILX (Intermediate term bond fund). Would it make any difference for me to change the VFIAX to 50% and add VMGMX at 10%?
In my opinion Vanguard 500 Index Fund Admiral Shares (VFIAX) is good enough by itself itself for investing in U.S. stocks. "In a 401(k) plan with limited choices one might very well opt for an S&P 500 index fund to serve as the domestic stock component of a three-fund portfolio." Wiki article, Three-fund Portfolio, "Other considerations".

A S&P 500 index fund covers over 80% of the U.S.stock market investing in stocks of selected large-cap and mid-cap U.S. companies. I'm the 28 years since the creation of the first total stock market index fund the two types of funds have had almost identical performance. Portfolio Visualizer, 1993-2020.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

loukycpa
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Re: The Three-Fund Portfolio

Post by loukycpa » Thu Aug 06, 2020 2:21 pm

I started investing 25 years ago in my early 20s. I am not ready to retire but I'm getting I am approaching the point where I realistically could. My portfolio target allocation right now is 40% VTSAX (total US stock market), 40% VBTLX (total US bond market), 10% VTIAX (total international stock market), and 10% VTAPX (short term TIPS).

I felt comfortable and was doing just find in only in two funds (50% VTSAX and 50% VBTLX) up until very recently. I love to keep things as simple as possible. Resisted adding international for a long time and haven't regretted it so far, but this seemed like a prudent time to add. Same for TIPS.

As of right now, I am thinking I could keep this allocation into retirement years, essentially forever.

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