Jonathan Clements, who wrote over 1,000 financial columns for The Wall Street Journal, is one of my favorite financial writers. I subscribe to his free newsletter which contains solid information in every issue. These are " investment gems" in his latest newsletter:
"Today, I own a dozen different Vanguard Group mutual funds, each giving me exposure to a different part of the global financial markets."
"The poor performers don’t much bother me. That’s the price you pay for portfolio insurance—otherwise known as diversification."
"What nags at me is the complexity."
"Perhaps the simplest solution would be to opt for a single Vanguard target-date fund for my longer-term money, plus a money-market fund to hold money that I’ll spend over the next few years. This will become a more appealing option in February, when Vanguard will lower its target-date fund expenses to 0.08%, equal to 8¢ a year for every $100 invested."
"If I bought a Vanguard Target Retirement or LifeStrategy fund, I’d be getting something akin to the classic three index-fund portfolio—a total U.S. stock market fund, a total U.S. bond market fund and a total international stock fund."
"But there’s a case to be made for buying the three funds directly, rather than as a package."
"I could make things even simpler by going for two total market funds—Vanguard’s Total World Stock ETF and its total U.S. bond market fund—plus a cash account for upcoming spending needs."
"One overriding principle will guide my thinking: As I age, I want my financial life to be simpler."
Best wishes.
TaylorJack Bogle's Words of Wisdom: "Never underrate either the majesty of simplicity or its proven effectiveness as a long-term strategy for productive investing."