Jack Bogle - Two Fund Portfolio

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Marseille07 wrote: Sat Jun 19, 2021 4:12 pm
Nathan Drake wrote: Sat Jun 19, 2021 3:54 pm Which is basically why I suggest those using a 100% US strategy aim for a 2% SWR, because the percentage based withdrawal method will be particularly bad during a prolonged downturn. There's only so much people can realistically cut from their budget.

This isn't optimal of course because who wants to save far more than they have to if they only had more diversification?
I'm not sure where you got the 2% from, but I'm not aware of studies projecting lower SWR for US TSM than a mixture of US & international.
There won't be any studies because the scenario we are currently in with both US TSM equity valuations and total US bond prices being at extreme all time highs is pretty unprecedented and makes the 4% SWR come into serious question in my opinion.

The only thing saving a 2000 retiree was the bond portion of the portfolio. Otherwise they would have ended up with only 20% of their starting value after 10 years. Bonds won't save a retiree today if we have a grayswan period.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Nathan Drake wrote: Sat Jun 19, 2021 4:33 pm There won't be any studies because the scenario we are currently in with both US TSM equity valuations and total US bond prices being at extreme all time highs is pretty unprecedented and makes the 4% SWR come into serious question in my opinion.

The only thing saving a 2000 retiree was the bond portion of the portfolio. Otherwise they would have ended up with only 20% of their starting value after 10 years. Bonds won't save a retiree today if we have a grayswan period.
Seems OK-ish to me: https://www.portfoliovisualizer.com/bac ... ion1_1=100

Remember, SWR being success means you have $0+ in your portfolio after 30 years. While this isn't the prettiest equity curve, they still have enough left to probably last through 9 more years.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Marseille07 wrote: Sat Jun 19, 2021 4:47 pm
Nathan Drake wrote: Sat Jun 19, 2021 4:33 pm There won't be any studies because the scenario we are currently in with both US TSM equity valuations and total US bond prices being at extreme all time highs is pretty unprecedented and makes the 4% SWR come into serious question in my opinion.

The only thing saving a 2000 retiree was the bond portion of the portfolio. Otherwise they would have ended up with only 20% of their starting value after 10 years. Bonds won't save a retiree today if we have a grayswan period.
Seems OK-ish to me: https://www.portfoliovisualizer.com/bac ... ion1_1=100

Remember, SWR being success means you have $0+ in your portfolio after 30 years. While this isn't the prettiest equity curve, they still have enough left to probably last through 9 more years.
Many of us are planning for early retirement, and clearly that portfolio is at high risk of not making it for a few more decades on a 40K withdrawal.

The future could have a situation that pans out worse, too. Either way - how comfortable would you have been to see your portfolio dip that low? There was no guarantee that the 2010-2021 period would be such a strong bull market.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Nathan Drake wrote: Sat Jun 19, 2021 4:56 pm Many of us are planning for early retirement, and clearly that portfolio is at high risk of not making it for a few more decades on a 40K withdrawal.

The future could have a situation that pans out worse, too. Either way - how comfortable would you have been to see your portfolio dip that low? There was no guarantee that the 2010-2021 period would be such a strong bull market.
Sure, and I wasn't suggesting 4% SWR for early retirees. I don't know how comfortable I would have been. I use SWR for the sake of arguments but I'm very much fixated on a percentage-based method.
User avatar
Topic Author
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Jack Bogle “Common Sense on Mutual Funds”

Chapter 4 - Simplicity

Page 137

“I would add that I am not persuaded that international funds are a necessary component of an investor’s portfolio. Foreign funds may reduce a portfolio’s volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component at its market weight simply pushes me further than I would dream of being pushed.”

Best wishes.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Ferdinand2014
Posts: 2390
Joined: Mon Dec 17, 2018 5:49 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 »

abuss368 wrote: Tue Jun 29, 2021 9:11 pm Jack Bogle “Common Sense on Mutual Funds”

Chapter 4 - Simplicity

Page 137

“I would add that I am not persuaded that international funds are a necessary component of an investor’s portfolio. Foreign funds may reduce a portfolio’s volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component at its market weight simply pushes me further than I would dream of being pushed.”

Best wishes.
Tony
This quote says in words my sentiment that I have lived by for over 24 years of investing in equities.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Ferdinand2014 wrote: Sat Jul 03, 2021 1:56 pm
abuss368 wrote: Tue Jun 29, 2021 9:11 pm Jack Bogle “Common Sense on Mutual Funds”

Chapter 4 - Simplicity

Page 137

“I would add that I am not persuaded that international funds are a necessary component of an investor’s portfolio. Foreign funds may reduce a portfolio’s volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component at its market weight simply pushes me further than I would dream of being pushed.”

Best wishes.
Tony
This quote says in words my sentiment that I have lived by for over 24 years of investing in equities.
+1. Over 2 decades of US only at Vanguard for me (VFINX -> VFIAX -> VTSAX).
User avatar
Taylor Larimore
Posts: 32842
Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

Re: Jack Bogle - Two Fund Portfolio

Post by Taylor Larimore »

Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
Topic Author
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Taylor Larimore wrote: Sat Jul 03, 2021 2:42 pm Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
Taylor -

I appreciate that you shared that conversation with Jack Bogle with all Bogleheads. I also wanted to thank you for adding to the Jack Bogle - Two Fund Portfolio thread.

All Bogleheads can learn from investing advice inspired by Jack Bogle!

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Taylor Larimore wrote: Sat Jul 03, 2021 2:42 pm Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
1789
Posts: 2223
Joined: Fri Aug 16, 2019 3:31 pm

Re: Jack Bogle - Two Fund Portfolio

Post by 1789 »

Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm
Taylor Larimore wrote: Sat Jul 03, 2021 2:42 pm Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
No one can predict the future.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
7eight9
Posts: 2406
Joined: Fri May 17, 2019 7:11 pm

Re: Jack Bogle - Two Fund Portfolio

Post by 7eight9 »

Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm
Taylor Larimore wrote: Sat Jul 03, 2021 2:42 pm Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
+1

It was a 50/50 coin flip. Either domestic or international was going to win. Hardly one of the best stock market forecasts ever made.

I can go to the roulette table and predict that black will beat red over a period of time. 50/50. Big deal.

Predict that a particular sector will collapse and get it right (ex Michael Burry) - now you have my respect.
I guess it all could be much worse. | They could be warming up my hearse.
Da5id
Posts: 5065
Joined: Fri Feb 26, 2016 7:20 am

Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

7eight9 wrote: Sat Jul 03, 2021 9:59 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
+1

It was a 50/50 coin flip. Either domestic or international was going to win. Hardly one of the best stock market forecasts ever made.

I can go to the roulette table and predict that black will beat red over a period of time. 50/50. Big deal.
Maybe he had a particular insight into the times and it wasn't just luck. Could be, no way to say for sure. I own 40% international anyway. Even if Bogle made the right call at the time, I don't believe US outperformance will last forever. But if it does, my 60% US holdings will do well and I'll be OK anyway.
User avatar
Topic Author
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Munir
Posts: 3200
Joined: Mon Feb 26, 2007 3:39 pm
Location: Oregon

Re: Jack Bogle - Two Fund Portfolio

Post by Munir »

abuss368 wrote: Fri Jul 23, 2021 6:01 pm Excellent article on our mentor:

https://www.mymoneyblog.com/jack-bogles ... folio.html
Please note it's a 9 1/2 year old article. It may (or may not) make it more relevant.
User avatar
Godot
Posts: 1016
Joined: Fri Jun 08, 2018 3:44 pm
Location: That place.

Re: Jack Bogle - Two Fund Portfolio

Post by Godot »

7eight9 wrote: Sat Jul 03, 2021 9:59 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm
Taylor Larimore wrote: Sat Jul 03, 2021 2:42 pm Bogleheads:

In candor (as always) you may find it interesting to learn what happened when I sent Mr. Bogle a preliminary copy of my book, "The Bogleheads' Guide To The Three-Fund Portfolio:"

Jack called me and he said I should change the title of my book to a "Two-Fund Portfolio" and eliminate the 20% of equity in an international fund. We had a long conversation in which I disagreed believing that the addition of an international stock fund was insurance for a Japanese-like stock bear market -- which has still not recovered from it's high in December 1989.

Subsequently, Jack wrote the "Forward.'' This is a portion:
"A WORD ABOUT NON-U.S. STOCKS:

In my first book, Bogle on Mutual Funds, published in 1994, I wrote that a long-term investor need not allocate any of his or her assets to non-U.S. stocks. But if they disagreed, I argued, they should limit their holding to 20% of their stock portion, given the significant extra risks involved (such as currency risk and sovereign risk).

My opinion was based on my expectation that the American economy would continue to grow over the long term, and that the market values of U.S. corporations would grow faster than the values of non-U.S. corporation. Since 1994, as it was to happen, the U.S. S&P 500 Index was to rise by 743%, while the EAFE Index of not-U.S. stocks rose by 237%."
Mr. Bogle was right! It is one of the best stock market forecasts ever made.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Limit international holdings to no more than one-fifth of the equity portfolio.”
So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them

Predict that a particular sector will collapse and get it right (ex Michael Burry) - now you have my respect.
Predict that a particular sector will collapse and get it right (ex Michael Burry) and put significant money behind your bet - now you have my respect.
"The day you die is just like any other, only shorter." | ― Samuel Beckett
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Nathan Drake wrote: Tue Jul 27, 2021 2:09 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
False. Remove the first half of the 20th century and the US still significantly outperformed ex-US in the second half of the 20th century. I've seen even nisiprius claim that US outperformance until recently was a result of Europe's Great Wars, and it's just not true. On the eve of WW1 in 1914, the US had already grown into the world's largest economy, having surpassed Britain around the turn of the century. And 200 years ago it was a tiny economy not even in the top 10. You don't go from small, fledgling economy to >50% global market cap without very large outperformance, and its performance from 1914-1950 was only a small component of that.
Triple digit golfer
Posts: 10433
Joined: Mon May 18, 2009 5:57 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Triple digit golfer »

UpsetRaptor wrote: Tue Jul 27, 2021 2:43 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:09 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
False. Remove the first half of the 20th century and the US still significantly outperformed ex-US in the second half of the 20th century. I've seen even nisiprius claim that US outperformance until recently was a result of Europe's Great Wars, and it's just not true. On the eve of WW1 in 1914, the US had already grown into the world's largest economy, having surpassed Britain around the turn of the century. And 200 years ago it was a tiny economy not even in the top 10. You don't go from small, fledgling economy to >50% global market cap without very large outperformance, and its performance from 1914-1950 was only a small component of that.
Please post the annual returns for the 20th century. I'd like to tinker but I can never find returns going back far enough.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 2:43 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:09 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
False. Remove the first half of the 20th century and the US still significantly outperformed ex-US in the second half of the 20th century. I've seen even nisiprius claim that US outperformance until recently was a result of Europe's Great Wars, and it's just not true. On the eve of WW1 in 1914, the US had already grown into the world's largest economy, having surpassed Britain around the turn of the century. And 200 years ago it was a tiny economy not even in the top 10. You don't go from small, fledgling economy to >50% global market cap without very large outperformance, and its performance from 1914-1950 was only a small component of that.
I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Triple digit golfer wrote: Tue Jul 27, 2021 2:49 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:43 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:09 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm
Nathan Drake wrote: Sat Jul 03, 2021 6:37 pm So because Bogle was right in the recent past doesn’t mean he will be correct for many investor’s that still have 30-60 years of investing in front of them
US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
False. Remove the first half of the 20th century and the US still significantly outperformed ex-US in the second half of the 20th century. I've seen even nisiprius claim that US outperformance until recently was a result of Europe's Great Wars, and it's just not true. On the eve of WW1 in 1914, the US had already grown into the world's largest economy, having surpassed Britain around the turn of the century. And 200 years ago it was a tiny economy not even in the top 10. You don't go from small, fledgling economy to >50% global market cap without very large outperformance, and its performance from 1914-1950 was only a small component of that.
Please post the annual returns for the 20th century. I'd like to tinker but I can never find returns going back far enough.
The best historical data going back to 1900 is Dimson Marsh, in the Credit Suisse report. You can google around to find various datasets by year.
Here's a link to the 2010 report (2010 being an "international-friendly" end year to prevent people from saying "but end of 20th century, or present time, is a US-friendly cherry-pick):
http://media.rtl.nl/media/financien/rtl ... 0813cs.pdf
Starting at 1, final return after those 110 years is ex-US 215, US 727.

And again, in the early 19th century the US was a fledgling economy not even in the top 10. This guarantees absolutely nothing moving forward, but it's simply ignoring history to refuse to acknowledge the long-term US outperformance for the past couple centuries, and/or discount it as being only the result of a couple decades of events here or there.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 3:05 pm
Triple digit golfer wrote: Tue Jul 27, 2021 2:49 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:43 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:09 pm
UpsetRaptor wrote: Tue Jul 27, 2021 2:05 pm

US outperformance has been well beyond "recent past". According to the best data we have, the Simson-Marsh data, the US outperformed ex-US by ~2% for the entire 20th century, which is not surprising to anyone that follows history. 200 years ago, the US was not even a top 10 economy, and it didn't surpass Britain as the world's largest economy until the late 19th century. The US has outperformed for centuries, since its inception actually. Sure, that doesn't guarantee anything for the future, but calling US outperformance "recent" is a misnomer, unless your timescale is millennium.
Remove the first 50 years (world wars) and the data is fairly even
False. Remove the first half of the 20th century and the US still significantly outperformed ex-US in the second half of the 20th century. I've seen even nisiprius claim that US outperformance until recently was a result of Europe's Great Wars, and it's just not true. On the eve of WW1 in 1914, the US had already grown into the world's largest economy, having surpassed Britain around the turn of the century. And 200 years ago it was a tiny economy not even in the top 10. You don't go from small, fledgling economy to >50% global market cap without very large outperformance, and its performance from 1914-1950 was only a small component of that.
Please post the annual returns for the 20th century. I'd like to tinker but I can never find returns going back far enough.
The best historical data going back to 1900 is Dimson Marsh, in the Credit Suisse report. You can google around to find various datasets by year.
Here's a link to the 2010 report (2010 being an "international-friendly" end year to prevent people from saying "but end of 20th century, or present time, is a US-friendly cherry-pick):
http://media.rtl.nl/media/financien/rtl ... 0813cs.pdf
Starting at 1, final return after those 110 years is ex-US 215, US 727.

And again, in the early 19th century the US was a fledgling economy not even in the top 10. This guarantees absolutely nothing moving forward, but it's simply ignoring history to refuse to acknowledge the long-term US outperformance for the past couple centuries, and/or discount it as being only the result of a couple decades of events here or there.
Of course it guarantees nothing going forward, especially after 10 years of valuation expansion for US stocks. Market is pricing in less risk, and less return
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Nathan Drake wrote: Tue Jul 27, 2021 2:52 pm I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 3:22 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:52 pm I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Dave55
Posts: 2017
Joined: Tue Sep 03, 2013 2:51 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Dave55 »

abuss368 wrote: Tue Jun 29, 2021 9:11 pm Jack Bogle “Common Sense on Mutual Funds”

Chapter 4 - Simplicity

Page 137

“I would add that I am not persuaded that international funds are a necessary component of an investor’s portfolio. Foreign funds may reduce a portfolio’s volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component at its market weight simply pushes me further than I would dream of being pushed.”

Best wishes.
Tony
Tony how can you run a Hedge fund with just 2 funds? Your investors will be looking for the exit before you can short your favorite stock, "Too Fund Airlines". :wink:

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue Jul 27, 2021 3:32 pm
UpsetRaptor wrote: Tue Jul 27, 2021 3:22 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:52 pm I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
Can't we all be friends? Have you always held international? If not, when did you switch from 100% US to international? Did that coincide with poor US performance?

Personally I have always been 100% US, I see no point to change now.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue Jul 27, 2021 3:36 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:32 pm
UpsetRaptor wrote: Tue Jul 27, 2021 3:22 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:52 pm I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
Can't we all be friends? Have you always held international? If not, when did you switch from 100% US to international? Did that coincide with poor US performance?

Personally I have always been 100% US, I see no point to change now.
Only briefly was I 100% US since it was my first investment before the GFC. Shortly thereafter I diversified internationally (50:50).

Returns have been fine. I sleep well at night knowing a dead decade or two is highly unlikely
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue Jul 27, 2021 3:42 pm
anon_investor wrote: Tue Jul 27, 2021 3:36 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:32 pm
UpsetRaptor wrote: Tue Jul 27, 2021 3:22 pm
Nathan Drake wrote: Tue Jul 27, 2021 2:52 pm I guess the Bogleheads wiki is wrong

My bad. US is best and always outperforms
If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
Can't we all be friends? Have you always held international? If not, when did you switch from 100% US to international? Did that coincide with poor US performance?

Personally I have always been 100% US, I see no point to change now.
Only briefly was I 100% US since it was my first investment. Shortly thereafter I diversified internationally (50:50).

Returns have been fine. I sleep well at night knowing a dead decade or two is highly unlikely
Was 50:50 market cap at the time? I think it is closer to 60:40 now. If you can sleep well at night, isn't that the point? I think most 100% US equity investors sleep well at night without international.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

anon_investor wrote: Tue Jul 27, 2021 3:45 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:42 pm
anon_investor wrote: Tue Jul 27, 2021 3:36 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:32 pm
UpsetRaptor wrote: Tue Jul 27, 2021 3:22 pm

If the wiki claims that ex-US outperformed US from 1950-2000, it is indeed wrong, but I doubt it actually claims that anywhere. You can cherry pick endpoints that capture the majority of Japan's hyper-bubble that'll have ex-US outperform US for, at most, a few decades. But to claim that means the US outperformance is only a recent thing is of course ignoring centuries of history.

I never said US will "always" outperform. Nothing lasts forever, even Rome. Just pointing out the recency-bias fallacy. Looking at the current world, I'm fine having the two-fund portfolio for my investing lifetime. If you're not that's fine, you do you.
Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
Can't we all be friends? Have you always held international? If not, when did you switch from 100% US to international? Did that coincide with poor US performance?

Personally I have always been 100% US, I see no point to change now.
Only briefly was I 100% US since it was my first investment. Shortly thereafter I diversified internationally (50:50).

Returns have been fine. I sleep well at night knowing a dead decade or two is highly unlikely
Was 50:50 market cap at the time? I think it is closer to 60:40 now. If you can sleep well at night, isn't that the point? I think most 100% US equity investors sleep well at night without international.

Roughly, yes.

That’s fine! You US only investors have more guts to concentrate risk knowing dead decades are a lot more common for you!

Don’t know how it makes you sleep better by taking on more tail risk, but you do you
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

Re: Jack Bogle - Two Fund Portfolio

Post by anon_investor »

Nathan Drake wrote: Tue Jul 27, 2021 3:46 pm
anon_investor wrote: Tue Jul 27, 2021 3:45 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:42 pm
anon_investor wrote: Tue Jul 27, 2021 3:36 pm
Nathan Drake wrote: Tue Jul 27, 2021 3:32 pm

Australia out performed US as well, and it didn’t need to become the world’s superpower to do so.

That’s fine if you enjoy the two fund portfolio, if it does really poorly going forward you’ll probably change your tune though
Can't we all be friends? Have you always held international? If not, when did you switch from 100% US to international? Did that coincide with poor US performance?

Personally I have always been 100% US, I see no point to change now.
Only briefly was I 100% US since it was my first investment. Shortly thereafter I diversified internationally (50:50).

Returns have been fine. I sleep well at night knowing a dead decade or two is highly unlikely
Was 50:50 market cap at the time? I think it is closer to 60:40 now. If you can sleep well at night, isn't that the point? I think most 100% US equity investors sleep well at night without international.

Roughly, yes.

That’s fine! You US only investors have more guts to concentrate risk knowing dead decades are a lot more common for you!

Don’t know how it makes you sleep better by taking on more tail risk, but you do you
Some people just have an adamantium spine... and some people don't! :sharebeer
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Yes, we each have to do what lets us sleep best at night. I do not lose one ounce of sleep over the extreme tail risk scenario of a US market crash that somehow misses the rest of the world such that a 42% current global ex-US equities ratio somehow saves my portfolio (though sure, I acknowledge there's some non-zero possibility of this). However, if I had gone from 100% US to 50:50 US:ex-US back in 2010 (really unlucky timing on that one, sorry Nathan, and I mean that genuinely), my personal portfolio would be, back of the envelope, about a half million lower. Now that would keep me up at night. Thank you Jack!
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 4:22 pm Yes, we each have to do what lets us sleep best at night. I do not lose one ounce of sleep over the extreme tail risk scenario of a US market crash that somehow misses the rest of the world such that a 42% current global ex-US equities ratio somehow saves my portfolio (though sure, I acknowledge there's some non-zero possibility of this). However, if I had gone from 100% US to 50:50 US:ex-US back in 2010 (really unlucky timing on that one, sorry Nathan, and I mean that genuinely), my personal portfolio would be, back of the envelope, about a half million lower. Now that would keep me up at night. Thank you Jack!
Not unlucky. I had 10% annualized returns over the period, and have saved 64X baseline level expenses during the past ten years.

Should I decide to retire tomorrow, I’m confident my diversified portfolio will withstand sequence of return risk much better than an undiversified portfolio.

I don’t care about comparing my performance to some arbitrary benchmarks. Do you not sleep well since you underperformed QQQ, BTC, or TSLA? How many millions did you miss out on?
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
UpsetRaptor
Posts: 1068
Joined: Tue Jan 19, 2016 4:15 pm

Re: Jack Bogle - Two Fund Portfolio

Post by UpsetRaptor »

Nathan Drake wrote: Tue Jul 27, 2021 4:38 pm
UpsetRaptor wrote: Tue Jul 27, 2021 4:22 pm Yes, we each have to do what lets us sleep best at night. I do not lose one ounce of sleep over the extreme tail risk scenario of a US market crash that somehow misses the rest of the world such that a 42% current global ex-US equities ratio somehow saves my portfolio (though sure, I acknowledge there's some non-zero possibility of this). However, if I had gone from 100% US to 50:50 US:ex-US back in 2010 (really unlucky timing on that one, sorry Nathan, and I mean that genuinely), my personal portfolio would be, back of the envelope, about a half million lower. Now that would keep me up at night. Thank you Jack!
I don’t care about comparing my performance to some arbitrary benchmarks. Do you not sleep well since you underperformed QQQ, BTC, or TSLA? How many millions did you miss out on?
Ah, the ol' slippery slope argument. The 2-fund portfolio this thread is about is VTI+BND, not QQQ, BTC, or TSLA. Nobody advocating the 2-fund portfolio is claiming any of those is a diverse enough portfolio. VTI represents thousands of stocks, across all styles and sectors, with global exposure, covering a market with centuries of strong performance, and which basically runs the current global economy. The need for further diversification is a solution in search of a non-existent problem, especially the diworsification much of ex-US brings with it.

We agree we all have to do what lets us sleep best at night. Adding ex-US makes some of us sleep worse, others better. If you're in the latter camp that's fine, you do you, but then why are you even posting in this thread?
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

UpsetRaptor wrote: Tue Jul 27, 2021 5:17 pm
Nathan Drake wrote: Tue Jul 27, 2021 4:38 pm
UpsetRaptor wrote: Tue Jul 27, 2021 4:22 pm Yes, we each have to do what lets us sleep best at night. I do not lose one ounce of sleep over the extreme tail risk scenario of a US market crash that somehow misses the rest of the world such that a 42% current global ex-US equities ratio somehow saves my portfolio (though sure, I acknowledge there's some non-zero possibility of this). However, if I had gone from 100% US to 50:50 US:ex-US back in 2010 (really unlucky timing on that one, sorry Nathan, and I mean that genuinely), my personal portfolio would be, back of the envelope, about a half million lower. Now that would keep me up at night. Thank you Jack!
I don’t care about comparing my performance to some arbitrary benchmarks. Do you not sleep well since you underperformed QQQ, BTC, or TSLA? How many millions did you miss out on?
Ah, the ol' slippery slope argument. The 2-fund portfolio this thread is about is VTI+BND, not QQQ, BTC, or TSLA. Nobody advocating the 2-fund portfolio is claiming any of those is a diverse enough portfolio. VTI represents thousands of stocks, across all styles and sectors, with global exposure, covering a market with centuries of strong performance, and which basically runs the current global economy. The need for further diversification is a solution in search of a non-existent problem, especially the diworsification much of ex-US brings with it.

We agree we all have to do what lets us sleep best at night. Adding ex-US makes some of us sleep worse, others better. If you're in the latter camp that's fine, you do you, but then why are you even posting in this thread?
Ah, right. Supposedly the “perfect” amount of diversification, but not the bad kind. More fallacious arguments to support a fairly concentrated portfolio.

Would you sleep better during 00-09 having negative real returns while EM 5X’d?
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Da5id
Posts: 5065
Joined: Fri Feb 26, 2016 7:20 am

Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

UpsetRaptor wrote: Tue Jul 27, 2021 5:17 pm We agree we all have to do what lets us sleep best at night. Adding ex-US makes some of us sleep worse, others better. If you're in the latter camp that's fine, you do you, but then why are you even posting in this thread?
If you feel that someone is posting inappropriately/off topic in a thread, you can feel free report the the post. That said, in a thread advocating for a position (here some flavor of 2 fund), it is surely reasonable/topical to also advocate against it. Threads need not be echo chambers.

IMO the "sleep well at night as an excuse to do what I want to do anyway" argument isn't the best in the world. It perhaps suggests that if US underperforms for 10-15 years (which it has done in the past) some folks won't sleep well at night? Each to their own. I slept well at night when I was 100% US (most of my investing life). I also sleep well at night the last 5-6 years that I've 60% US/40% Int'l. I guess I just sleep better than others :)
User avatar
Topic Author
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

What I learned over the years:

The “right” and “best” portfolio is the one that works for you and allows you to sleep well at night.

Everything else is irrelevant.

Tony. 🚀
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
Munir
Posts: 3200
Joined: Mon Feb 26, 2007 3:39 pm
Location: Oregon

Re: Jack Bogle - Two Fund Portfolio

Post by Munir »

anon_investor wrote: Tue Jul 27, 2021 3:45 pm

If you can sleep well at night, isn't that the point? I think most 100% US equity investors sleep well at night without international.
I don't just sleep well without internationals, but I sleep VERY well. :happy
Bluemnatra
Posts: 492
Joined: Fri Jun 11, 2021 3:37 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Bluemnatra »

Throw me in with the Two Fund Portfolio group. I'm a beginner investor with two serious years behind me. I have the S&P 500 index and Total Bond Index for my 401k and Total Stock Market Index in my Fidelity Roth, Rollover, and Brokerage. As a beginner I agonized over AA and after reading, and re-reading, and re-re-reading Jack Bogle's little book on common sense investing and the plethora of his video's I'm staying the course with a US only portfolio as to what I feel comfortable with. JL Collins' A simple path to wealth also helped solidify this strategy for me. And I really looked for compelling information to sway me into the International camp. I wanted to be convinced I needed international and in the end I didn't find a compelling reason to need international. And I am okay with and accept the fact that there will be years of International outperformance, but in the end I was not convinced that a US only portfolio would not be able to serve my needs. I do understand why people add International. I have gone with the US only portfolio based on the reasons stated by Jack Bogle.
"The greatest enemy of a good plan is the dream of a perfect plan"
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Bluemnatra wrote: Thu Aug 05, 2021 6:16 pm Throw me in with the Two Fund Portfolio group. I'm a beginner investor with two serious years behind me. I have the S&P 500 index and Total Bond Index for my 401k and Total Stock Market Index in my Fidelity Roth, Rollover, and Brokerage. As a beginner I agonized over AA and after reading, and re-reading, and re-re-reading Jack Bogle's little book on common sense investing and the plethora of his video's I'm staying the course with a US only portfolio as to what I feel comfortable with. JL Collins' A simple path to wealth also helped solidify this strategy for me. And I really looked for compelling information to sway me into the International camp. I wanted to be convinced I needed international and in the end I didn't find a compelling reason to need international. And I am okay with and accept the fact that there will be years of International outperformance, but in the end I was not convinced that a US only portfolio would not be able to serve my needs. I do understand why people add International. I have gone with the US only portfolio based on the reasons stated by Jack Bogle.
Welcome to the club!
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Bluemnatra wrote: Thu Aug 05, 2021 6:16 pm Throw me in with the Two Fund Portfolio group. I'm a beginner investor with two serious years behind me. I have the S&P 500 index and Total Bond Index for my 401k and Total Stock Market Index in my Fidelity Roth, Rollover, and Brokerage. As a beginner I agonized over AA and after reading, and re-reading, and re-re-reading Jack Bogle's little book on common sense investing and the plethora of his video's I'm staying the course with a US only portfolio as to what I feel comfortable with. JL Collins' A simple path to wealth also helped solidify this strategy for me. And I really looked for compelling information to sway me into the International camp. I wanted to be convinced I needed international and in the end I didn't find a compelling reason to need international. And I am okay with and accept the fact that there will be years of International outperformance, but in the end I was not convinced that a US only portfolio would not be able to serve my needs. I do understand why people add International. I have gone with the US only portfolio based on the reasons stated by Jack Bogle.
As long as you realize the past two years won't be the case throughout your entire investing career. You will have long periods of underperformance against other asset classes (International, EM, SCV, etc).

You may not need any of these other assets, but diversification is the only free lunch with investing. And there's no guarantee that US only investing will fully meet your needs. It didn't for a Japan-only investor.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
tomd37
Posts: 4098
Joined: Thu Mar 01, 2007 9:39 pm
Location: Middle Tennessee

Re: Jack Bogle - Two Fund Portfolio

Post by tomd37 »

Bluemanatra - I am at the very opposite end of investing as you at age 84. I really could not and did not start investing until age 50 and then had a fairly basic 70/30 asset allocation. Fortunately the past 34 years have been very good to me, but the fund selection has basically been the same with the addition of a REIT index fund in the past eleven years or so. The asset allocation over the years with VTSAX and VBILX has dropped for 70/30 to 40/60 where I will remain.

I too agree with Jack's thinking regarding not necessarily needing international investments. In my opinion a 20% allocation of international investing on a 40% equity portfolio (8% of equity) would not have any impact on my portfolio. I have all of Jack's books on the shelf above me along with JL Collins' "The Simple Path to Wealth".

I retired in summer of 2002 so you can see the number of bad times I've been through, but have not waived from. Do what your mind and heart call for, but most of all "Stay the Course" in both the good and bad times.
Tom D.
Ferdinand2014
Posts: 2390
Joined: Mon Dec 17, 2018 5:49 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Ferdinand2014 »

abuss368 wrote: Tue Jul 27, 2021 7:03 pm What I learned over the years:

The “right” and “best” portfolio is the one that works for you and allows you to sleep well at night.

Everything else is irrelevant.

Tony. 🚀
This is an important point that often gets overlooked. A high savings rate, living below your means and staying the course trounces any nuanced portfolio. In order to stay the course you must have conviction that the portfolio you have chosen is something you will be comfortable with for decades - for this is the best portfolio of all.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
Bluemnatra
Posts: 492
Joined: Fri Jun 11, 2021 3:37 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Bluemnatra »

tomd37 wrote: Thu Aug 05, 2021 8:30 pm Bluemanatra - I am at the very opposite end of investing as you at age 84. I really could not and did not start investing until age 50 and then had a fairly basic 70/30 asset allocation. Fortunately the past 34 years have been very good to me, but the fund selection has basically been the same with the addition of a REIT index fund in the past eleven years or so. The asset allocation over the years with VTSAX and VBILX has dropped for 70/30 to 40/60 where I will remain.

I too agree with Jack's thinking regarding not necessarily needing international investments. In my opinion a 20% allocation of international investing on a 40% equity portfolio (8% of equity) would not have any impact on my portfolio. I have all of Jack's books on the shelf above me along with JL Collins' "The Simple Path to Wealth".

I retired in summer of 2002 so you can see the number of bad times I've been through, but have not waived from. Do what your mind and heart call for, but most of all "Stay the Course" in both the good and bad times.
Thank you for that Tom. I started investing only a small amount two years ago when I was 35, but now since I've paid off all non-mortgage debt I've been able to really start accumulating. However, I regret not starting much sooner. Reading Jack's books and listening to him and JL Collins I feel confident if I'm able to follow the blueprint they've laid out I can be successful, as Jack says "invest you must" even if the outlook is poor and that is a plan I can get behind and will stay the course. I'm not as confident in myself with an international allocation, but I have belief in what Bogle says about growing with America and getting my fair share of the pie that corporate America bakes each year, whatever that may be. As was said earlier if the person believes in their plan then that's the plan they should go with. I am confident that a US only portfolio will help me reach my goals and I certainly don't expect the good times to continue to roll and fully expect RTM to rear its head, however, I am confident I can continue to stay the course and invest month after month in this plan.
"The greatest enemy of a good plan is the dream of a perfect plan"
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Bluemnatra wrote: Thu Aug 05, 2021 10:31 pm
tomd37 wrote: Thu Aug 05, 2021 8:30 pm Bluemanatra - I am at the very opposite end of investing as you at age 84. I really could not and did not start investing until age 50 and then had a fairly basic 70/30 asset allocation. Fortunately the past 34 years have been very good to me, but the fund selection has basically been the same with the addition of a REIT index fund in the past eleven years or so. The asset allocation over the years with VTSAX and VBILX has dropped for 70/30 to 40/60 where I will remain.

I too agree with Jack's thinking regarding not necessarily needing international investments. In my opinion a 20% allocation of international investing on a 40% equity portfolio (8% of equity) would not have any impact on my portfolio. I have all of Jack's books on the shelf above me along with JL Collins' "The Simple Path to Wealth".

I retired in summer of 2002 so you can see the number of bad times I've been through, but have not waived from. Do what your mind and heart call for, but most of all "Stay the Course" in both the good and bad times.
Thank you for that Tom. I started investing only a small amount two years ago when I was 35, but now since I've paid off all non-mortgage debt I've been able to really start accumulating. However, I regret not starting much sooner. Reading Jack's books and listening to him and JL Collins I feel confident if I'm able to follow the blueprint they've laid out I can be successful, as Jack says "invest you must" even if the outlook is poor and that is a plan I can get behind and will stay the course. I'm not as confident in myself with an international allocation, but I have belief in what Bogle says about growing with America and getting my fair share of the pie that corporate America bakes each year, whatever that may be. As was said earlier if the person believes in their plan then that's the plan they should go with. I am confident that a US only portfolio will help me reach my goals and I certainly don't expect the good times to continue to roll and fully expect RTM to rear its head, however, I am confident I can continue to stay the course and invest month after month in this plan.
There are other parts of America that are a better value. If I were you, I'd be concerned about the following chart. Can you really stay the course like in 00-09 where the S&P goes nowhere?

There's no courage with a strategy that has been winning for the past decade (and likely not great returns for the subsequent decade).

Image
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
User avatar
Topic Author
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Jack Bogle - Two Fund Portfolio

Post by abuss368 »

Bluemnatra wrote: Thu Aug 05, 2021 6:16 pm Throw me in with the Two Fund Portfolio group. I'm a beginner investor with two serious years behind me. I have the S&P 500 index and Total Bond Index for my 401k and Total Stock Market Index in my Fidelity Roth, Rollover, and Brokerage. As a beginner I agonized over AA and after reading, and re-reading, and re-re-reading Jack Bogle's little book on common sense investing and the plethora of his video's I'm staying the course with a US only portfolio as to what I feel comfortable with. JL Collins' A simple path to wealth also helped solidify this strategy for me. And I really looked for compelling information to sway me into the International camp. I wanted to be convinced I needed international and in the end I didn't find a compelling reason to need international. And I am okay with and accept the fact that there will be years of International outperformance, but in the end I was not convinced that a US only portfolio would not be able to serve my needs. I do understand why people add International. I have gone with the US only portfolio based on the reasons stated by Jack Bogle.
Congrats on reaching a portfolio you can stay the course with.

The best part about the Jack Bogle and Warren Buffett Two Fund Portfolio is that it will never be below average!

Tony
John C. Bogle: “Simplicity is the master key to financial success."
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

abuss368 wrote: Fri Aug 06, 2021 10:44 am
Bluemnatra wrote: Thu Aug 05, 2021 6:16 pm Throw me in with the Two Fund Portfolio group. I'm a beginner investor with two serious years behind me. I have the S&P 500 index and Total Bond Index for my 401k and Total Stock Market Index in my Fidelity Roth, Rollover, and Brokerage. As a beginner I agonized over AA and after reading, and re-reading, and re-re-reading Jack Bogle's little book on common sense investing and the plethora of his video's I'm staying the course with a US only portfolio as to what I feel comfortable with. JL Collins' A simple path to wealth also helped solidify this strategy for me. And I really looked for compelling information to sway me into the International camp. I wanted to be convinced I needed international and in the end I didn't find a compelling reason to need international. And I am okay with and accept the fact that there will be years of International outperformance, but in the end I was not convinced that a US only portfolio would not be able to serve my needs. I do understand why people add International. I have gone with the US only portfolio based on the reasons stated by Jack Bogle.
Congrats on reaching a portfolio you can stay the course with.

The best part about the Jack Bogle and Warren Buffett Two Fund Portfolio is that it will never be below average!

Tony
Source?
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Jack Bogle - Two Fund Portfolio

Post by Marseille07 »

Nathan Drake wrote: Fri Aug 06, 2021 10:50 am Source?
This really depends on your AA. Both 90/10 and 10/90 are two funders, but obviously they have very different return profiles.
Nathan Drake
Posts: 6234
Joined: Mon Apr 11, 2011 12:28 am

Re: Jack Bogle - Two Fund Portfolio

Post by Nathan Drake »

Marseille07 wrote: Fri Aug 06, 2021 11:04 am
Nathan Drake wrote: Fri Aug 06, 2021 10:50 am Source?
This really depends on your AA. Both 90/10 and 10/90 are two funders, but obviously they have very different return profiles.
If you define “average” as being only VTSAX, then sure….but “average” to me would be closer to market cap weighting of all global equities….
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Da5id
Posts: 5065
Joined: Fri Feb 26, 2016 7:20 am

Re: Jack Bogle - Two Fund Portfolio

Post by Da5id »

Marseille07 wrote: Fri Aug 06, 2021 11:04 am
Nathan Drake wrote: Fri Aug 06, 2021 10:50 am Source?
This really depends on your AA. Both 90/10 and 10/90 are two funders, but obviously they have very different return profiles.
I think more that it is a circular definition of average. If you invest in 100% gold, you will never be below average*.




*of those who invest in 100% gold
Post Reply