Taylor- would you also consider VBIAX to fit into the "target fund" scenario? I know it only has U.S. stocks and bonds vs. most target date funds which add international stocks and bonds.Taylor Larimore wrote: ↑Wed May 09, 2018 8:19 amshorekat14:This is probably a very rookie question (and if it's misplaced, apologies in advance) - but what is the advantage of going with a three-fund portfolio (US equity/non-US equity/fixed income) vs. a single target fund?
It is not a "rookie" question because the Three-Fund and a low-cost Target Fund are both excellent portfolios.
The primary advantage of The Three-Fund Portfolio is that it is a more tax-efficient portfolio if the investor has both tax-advantaged accounts (IRA, 401k, etc.) and taxable accounts. The Three-Fund Portfolio allows the investor to place the two tax-efficient funds (Total Stock Market and Total International) in the taxable account (or tax-advantaged account) and place the tax inefficient fund (Total Bond Market) in a tax-advantaged account.
The primary advantage of the Target Fund is its one-fund simplicity and its increased diversification. If all accounts are tax-advantaged, I recommend a simple low-cost target fund designed by company experts.
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