Redacted

[KlangFool]

20% mini-Larry

Hi Klang, I assume you mean this for "Larry" and "mini" implies you only follow this strategy at 20%?

Correct!

KlangFool

[Taylor Larimore]

My answer is to do not trust the 3 funds 100%.

My portfolio is a combination of 3 strategies: 45% 3 funds 35% Wellington Fund, 20% mini-Larry.

KlangFool

will86:

The Three-Fund Portfolio contains thousands of stocks and bonds -- including those in the above portfolio. In my opinion there is no need to add complexity, expenses and taxes with overlapping funds.

Best wishes.
Taylor

Jack Bogle's Words of Wisdom: "Simplicity is the master key to financial success. -- We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."

[will86]

will86:

The Three-Fund Portfolio contains thousands of stocks and bonds -- including those in the above portfolio. In my opinion there is no need to add complexity, expenses and taxes with overlapping funds.

Thanks Taylor

[unwitting_gulag]

I couldn't agree more with your assessment of the "S&P 5". This index has become largely, a tech fund, not unlike what we saw during the internet boom of 1998 - 2000. I wouldn't be surprised if we see the same type of market pattern with AI as well. Any company that is even remotely connected to AI sees their stock take off. Just like in 1998, all a company had to do was add ".com" after their name and it was off to the races. Well, we saw how that all ended. Some exposure to tech is good for a portfolio, but I'm afraid those that have an over-allocation to it, could be in a for a major correction at some point.

I agree with this. Not only does the market have a proclivity toward mega-tech w/ AI, but there also seems to be an aversion to physical assets (factories, durable goods, utilities). Another way of loosely saying this is, "pro-Nasdaq, con-Dow." We know that divergence always swings back over time.

This has been the story of our times. It at least partially explains the out-performance of US stocks, vs. most of the rest of the world. It explains why large-cap has been doing better than mid- or small-cap.. or why growth has beaten value. I'm not asserting that we're overdue for a reversal, or that such reversals can be timed or captured in any concentrated why. It's just a lament over how concentrated things have been, how narrow, and for how long. The canonical pillars of sober and humble investing... diversification, patience, eschewal of trend-chasing,... have felt, for a long time, like repeated curt slaps in the face.

In a way, it's continuation of the dot-com era, with 2000-2003 a brief interregnum where things were more "normal". Why does it feel like 1996 all over again? But maybe 1996 wasn't a bad place to be, given the 4 years that followed?

[Angel of Empire]

This has a 1999 feel to it. And is not adequate diversification- just too top heavy. Be careful.

[HomerJ]

If we rewind back to the year 2000, we find that the S&P 500 hasn't even tripled (ignoring dividends, of course) in 23 years. This is not a historically impressive gain. But even THAT gain was bought, as it were, by the public-sector and cultural forces, to which you allude. All together, neither a good deal for society, nor a boon for equity investors. The entire 21st century so far, has been very much humdrum. And narrowly led!

Ignoring dividends means all your conclusions are wrong. You can't skip dividends when calculating returns.

Since 2000 (a market top, probably just a bad a place to start as March 2009), the US stock market is up 4.4x or an annualized 6.6% nominal return.

That is indeed lower than historical averages, but pretty good as the WORST CASE starting year so far in the past 60 years.

Pick any other year and the returns have been higher.

[HomerJ]

The canonical pillars of sober and humble investing... diversification, patience, eschewal of trend-chasing,... have felt, for a long time, like repeated curt slaps in the face.

Buying and holding the Boglehead standard 3 funds for the past 30 years (diversification, patience, eschewal of trend-chasing) have made us all rich.

I'm guessing you went against the standard Boglehead portfolio, and listened to people who thought they could predict the future by looking at "metrics". Maybe they told you to overweight factors, or international, or small-value, and be patient for the mean to revert. Is that what you mean by "eschewal of trend-chasing?"

And if you held on for 10+ years, I agree you have been patient. I could see how could feel it was like "curt slaps in the face" that it hasn't paid off yet.

I don't think investing in the SP500 or the Total Stock Market can be considered "trend-chasing". I think you were doing the opposite. You were trying to guess the next trend and get in on it.

The next 10 years may be different. But in the long run, the SP500 should be fine. Even when (not if) we do have some bad years.

In a way, it's continuation of the dot-com era, with 2000-2003 a brief interregnum where things were more "normal". Why does it feel like 1996 all over again? But maybe 1996 wasn't a bad place to be, given the 4 years that followed?

1996 would be great....

2000-2023 - 6.64% a year nominal.
1996-2023 - 9.11% a year nominal.

[unwitting_gulag]

Buying and holding the Boglehead standard 3 funds for the past 30 years (diversification, patience, eschewal of trend-chasing) have made us all rich.

I'm guessing you went against the standard Boglehead portfolio, and listened to people who thought they could predict the future by looking at "metrics". Maybe they told you to overweight factors, or international, or small-value, and be patient for the mean to revert. Is that what you mean by "eschewal of trend-chasing?"

And if you held on for 10+ years, I agree you have been patient. I could see how could feel it was like "curt slaps in the face" that it hasn't paid off yet.

I don't think investing in the SP500 or the Total Stock Market can be considered "trend-chasing". I think you were doing the opposite. You were trying to guess the next trend and get in on it.

I’ve been at this for around 30 years, mostly in index funds. The one deviation from Boglehead orthodoxy is that I’ve tended to overweight small-cap and mid-cap vs. S&P 500, now much to my chagrin. There is to my knowledge no Boglehead orthodoxy on US vs. foreign; witness the proliferation of threads on that. Some time ago, my allocation was much along Vanguard’s recommendations, but because I did not rebalance, the portfolio has drifted to be more US-centric.

So the regrets that I voice, are not those of frenetic grasping for the hot investment of the moment, but on the contrary, of being the good kid in class, who did his homework and studied for the exam, but who only managed to eke-out a C+.

When we’re young and just starting out, these details don’t matter, because our portfolios grow foremost from additional savings, and not from some increment in annual return. Decades later, there’s precious little that we can do, by saving more. We become dependent on the caprice of Mr. Market.

If you have indeed gotten rich, then I congratulate you, Sir! But the irony is that we are more vulnerable to the vagaries of the market, as we get richer. It becomes more and more crucial, to get it “right” – and more harrowing, if we stumble.

[donaldfair71]

Buying and holding the Boglehead standard 3 funds for the past 30 years (diversification, patience, eschewal of trend-chasing) have made us all rich.

I'm guessing you went against the standard Boglehead portfolio, and listened to people who thought they could predict the future by looking at "metrics". Maybe they told you to overweight factors, or international, or small-value, and be patient for the mean to revert. Is that what you mean by "eschewal of trend-chasing?"

And if you held on for 10+ years, I agree you have been patient. I could see how could feel it was like "curt slaps in the face" that it hasn't paid off yet.

I don't think investing in the SP500 or the Total Stock Market can be considered "trend-chasing". I think you were doing the opposite. You were trying to guess the next trend and get in on it.

I’ve been at this for around 30 years, mostly in index funds. The one deviation from Boglehead orthodoxy is that I’ve tended to overweight small-cap and mid-cap vs. S&P 500, now much to my chagrin. There is to my knowledge no Boglehead orthodoxy on US vs. foreign; witness the proliferation of threads on that. Some time ago, my allocation was much along Vanguard’s recommendations, but because I did not rebalance, the portfolio has drifted to be more US-centric.

So the regrets that I voice, are not those of frenetic grasping for the hot investment of the moment, but on the contrary, of being the good kid in class, who did his homework and studied for the exam, but who only managed to eke-out a C+.

When we’re young and just starting out, these details don’t matter, because our portfolios grow foremost from additional savings, and not from some increment in annual return. Decades later, there’s precious little that we can do, by saving more. We become dependent on the caprice of Mr. Market.

If you have indeed gotten rich, then I congratulate you, Sir! But the irony is that we are more vulnerable to the vagaries of the market, as we get richer. It becomes more and more crucial, to get it “right” – and more harrowing, if we stumble.

Why do you believe you only eked out a C+?

You didn’t get an A or an F or anything in between. You got what the market offered. That’s all anyone following the traditional orthodoxy of Bogleheads could ever ask to get.

[HomerJ]

Buying and holding the Boglehead standard 3 funds for the past 30 years (diversification, patience, eschewal of trend-chasing) have made us all rich.

I'm guessing you went against the standard Boglehead portfolio, and listened to people who thought they could predict the future by looking at "metrics". Maybe they told you to overweight factors, or international, or small-value, and be patient for the mean to revert. Is that what you mean by "eschewal of trend-chasing?"

And if you held on for 10+ years, I agree you have been patient. I could see how could feel it was like "curt slaps in the face" that it hasn't paid off yet.

I don't think investing in the SP500 or the Total Stock Market can be considered "trend-chasing". I think you were doing the opposite. You were trying to guess the next trend and get in on it.

I’ve been at this for around 30 years, mostly in index funds. The one deviation from Boglehead orthodoxy is that I’ve tended to overweight small-cap and mid-cap vs. S&P 500, now much to my chagrin. There is to my knowledge no Boglehead orthodoxy on US vs. foreign; witness the proliferation of threads on that. Some time ago, my allocation was much along Vanguard’s recommendations, but because I did not rebalance, the portfolio has drifted to be more US-centric.

So the regrets that I voice, are not those of frenetic grasping for the hot investment of the moment, but on the contrary, of being the good kid in class, who did his homework and studied for the exam, but who only managed to eke-out a C+.

When we’re young and just starting out, these details don’t matter, because our portfolios grow foremost from additional savings, and not from some increment in annual return. Decades later, there’s precious little that we can do, by saving more. We become dependent on the caprice of Mr. Market.

If you have indeed gotten rich, then I congratulate you, Sir! But the irony is that we are more vulnerable to the vagaries of the market, as we get richer. It becomes more and more crucial, to get it “right” – and more harrowing, if we stumble.

Why do you believe you only eked out a C+?

You didn’t get an A or an F or anything in between. You got what the market offered. That’s all anyone following the traditional orthodoxy of Bogleheads could ever ask to get.

Right... You get what you get, and you don't throw a fit.

The universe owes us nothing.

Money invested in 2000 in the SP500 returned 6.64% a year.
Money invested in 2001 in the SP500 returned more
Money invested in 2002 in the SP500 returned more
Money invested in 2003 in the SP500 returned more
Money invested in 1999 in the SP500 returned more
Money invested in 1998 in the SP500 returned more
Money invested in 1997 in the SP500 returned more

and so on and so on.

EVERY year we invested 5+ years in the past in the SP500 has done pretty well up to 2023.

Couldn't really ask for a better deal.

Now, I had 50% of my money in bonds from 2011 on or so... so I have a lot less than I could have had, if I had been 100% in SP500.

But I don't consider that a C+... I still think of it as a B+, because I was safe the entire time, if things had turned out different, and I STILL made enough, since all the returns over the past 30 years have been so decent, to retire at 55 (I really could retire right now at 54, but my wife won't let me)