The Three-Fund Portfolio

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Triple digit golfer
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Re: The Three-Fund Portfolio

Post by Triple digit golfer »

Thank you sycamore and ruralavalon for your replies as well.
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Re: The Three-Fund Portfolio

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Triple digit golfer wrote: Tue Jan 05, 2021 10:30 am Thank you sycamore and ruralavalon for your replies as well.
Mr. Bogle's comments in this article influenced me to use Vanguard Intermediate-term Bond Index Fund (VBILX). Morningstar (10/29/2014) "Bogle: How Bond Indexing Could Be Better", link.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Triple digit golfer
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Re: The Three-Fund Portfolio

Post by Triple digit golfer »

ruralavalon wrote: Tue Jan 05, 2021 11:57 am
Triple digit golfer wrote: Tue Jan 05, 2021 10:30 am Thank you sycamore and ruralavalon for your replies as well.
Mr. Bogle's comments in this article influenced me to use Vanguard Intermediate-term Bond Index Fund (VBILX). Morningstar (10/29/2014) "Bogle: How Bond Indexing Could Be Better", link.
Thanks, good article!

I am looking at the SEC yield and Total Bond is actually 0.05% higher than intermediate term index right now. Why would that be?

I am not using this at all to make a decision on investing. Just genuinely curious.
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Re: The Three-Fund Portfolio

Post by bertilak »

ruralavalon wrote: Tue Jan 05, 2021 11:57 am
Triple digit golfer wrote: Tue Jan 05, 2021 10:30 am Thank you sycamore and ruralavalon for your replies as well.
Mr. Bogle's comments in this article influenced me to use Vanguard Intermediate-term Bond Index Fund (VBILX). Morningstar (10/29/2014) "Bogle: How Bond Indexing Could Be Better", link.
Thanks for that. I'm in intermediate bond almost by accident (TLH from total bond) but now I feel like a genius.

Intermediate does give me noticeably bigger dividends and I don't see it as being enough riskier to make a difference to me.
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Taylor Larimore
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My visit to a large bond room

Post by Taylor Larimore »

Bogleheads:

I was a director of the Dade County (Miami) Housing Authority which issues municipal bonds. We were invited to visit the bond-room of Shearson-Lehman in New York City. I was amazed to see more than 50 highly paid bond specialists staring at their computers (2 or 3 at a desk). We were told this goes on 24 hours a day. These bond experts were looking for the slightest advantage in risk or return of world-wide bonds.

My takeaway was that it is impossible for you and me to outsmart the bond market. Accordingly, I simply hold Vanguard Total Bond Market Index Fund, now the largest bond fund on the planet. It has served us well.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The Lehman Bond Index (total bond market), in substance, is an appropriate choice for investors with an intermediate-term time horizon and seeking top quality."
"Simplicity is the master key to financial success." -- Jack Bogle
Triple digit golfer
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Re: The Three-Fund Portfolio

Post by Triple digit golfer »

bertilak wrote: Tue Jan 05, 2021 12:14 pm
ruralavalon wrote: Tue Jan 05, 2021 11:57 am
Triple digit golfer wrote: Tue Jan 05, 2021 10:30 am Thank you sycamore and ruralavalon for your replies as well.
Mr. Bogle's comments in this article influenced me to use Vanguard Intermediate-term Bond Index Fund (VBILX). Morningstar (10/29/2014) "Bogle: How Bond Indexing Could Be Better", link.
Thanks for that. I'm in intermediate bond almost by accident (TLH from total bond) but now I feel like a genius.

Intermediate does give me noticeably bigger dividends and I don't see it as being enough riskier to make a difference to me.
I'm not seeing much bigger dividends in recent months.
manlymatt83
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

What do y'all think of VIVLX in an individual investment account?
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Re: The Three-Fund Portfolio

Post by Triple digit golfer »

manlymatt83 wrote: Tue Jan 05, 2021 2:04 pm What do y'all think of VIVLX in an individual investment account?
Taxable account? Not the most tax efficient, but with bond yields so low it isn't nearly as bad as it would have been a decade or two ago. I think it is perfectly fine.

Honestly, if I had the opportunity to do it over again and had good "target" type funds in my 401k, I would simply hold a target fund that has my desired stock/bond allocation in all of my accounts. Taxable, 401k, Roth, the whole shebang.

This thread will be of interest to you: viewtopic.php?t=287967
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Re: The Three-Fund Portfolio

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manlymatt83 wrote: Tue Jan 05, 2021 2:04 pm What do y'all think of VIVLX in an individual investment account?
Manlymatt83:

VIVLX (Vanguard Target-Date 2051+) is fine if you have the $5 million minimum investment.

I prefer individual funds which allow you to put tax-efficient funds in taxable accounts and tax-inefficient funds in tax-advantaged accounts. The overall tax-efficiency can be substantial.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The Three-Fund Portfolio will help you to develop a sound asset allocation strategy, make smart investment selections, and guide the implementation of your plan."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: The Three-Fund Portfolio

Post by CABob »

VIVLX (Vanguard Target-Date 2051+) is fine if you have the $5 million minimum investment.
This may be in a 401k (or similar) account where an individual does not need that minimum.
Bob
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Re: The Three-Fund Portfolio

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CABob wrote: Tue Jan 05, 2021 2:48 pm
VIVLX (Vanguard Target-Date 2051+) is fine if you have the $5 million minimum investment.
This may be in a 401k (or similar) account where an individual does not need that minimum.
CABob:

Investor referred to an "individual investment account."

Taylor
Jack Bogle's Words of Wisdom: "Investing in equities entails four risks: stock risk, style risk, manager risk, and market risk. You can easily eliminate the first three of these risks simply by owning the entire stock market."
"Simplicity is the master key to financial success." -- Jack Bogle
manlymatt83
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Taylor Larimore wrote: Tue Jan 05, 2021 2:22 pm
manlymatt83 wrote: Tue Jan 05, 2021 2:04 pm What do y'all think of VIVLX in an individual investment account?
Manlymatt83:

VIVLX (Vanguard Target-Date 2051+) is fine if you have the $5 million minimum investment.

I prefer individual funds which allow you to put tax-efficient funds in taxable accounts and tax-inefficient funds in tax-advantaged accounts. The overall tax-efficiency can be substantial.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The Three-Fund Portfolio will help you to develop a sound asset allocation strategy, make smart investment selections, and guide the implementation of your plan."
Thanks Taylor! You're right that this was something available in a 403(b) but not in a individual account. I didn't realize it until after I had asked.
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Re: The Three-Fund Portfolio

Post by HRG »

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Triple digit golfer
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Re: The Three-Fund Portfolio

Post by Triple digit golfer »

HRG wrote: Sun Jan 10, 2021 7:57 am My largest holding is the TSM index fund. Being that technology makes up 26% of the TSM, and the FAANG stocks make up the bulk of that sector, does anyone have a recommendation for another index fund that would still include technology, but not the FAANG stocks? I know I can build something close by using sector MF's or ETF's, but searching to see if anyone has suggestions for a single fund.
I don't have a recommendation and don't recommend that. Why would you want to exclude a quarter of the market?
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Re: The Three-Fund Portfolio

Post by Taylor Larimore »

HRG wrote: Sun Jan 10, 2021 7:57 am My largest holding is the TSM index fund. Being that technology makes up 26% of the TSM, and the FAANG stocks make up the bulk of that sector, does anyone have a recommendation for another index fund that would still include technology, but not the FAANG stocks? I know I can build something close by using sector MF's or ETF's, but searching to see if anyone has suggestions for a single fund.
Bogleheads:

Please keep this topic about "The Three-Fund Portfolio."

Thank you and best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: The Three-Fund Portfolio

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Taylor Larimore wrote: Sun Jan 10, 2021 10:04 am
HRG wrote: Sun Jan 10, 2021 7:57 am My largest holding is the TSM index fund. Being that technology makes up 26% of the TSM, and the FAANG stocks make up the bulk of that sector, does anyone have a recommendation for another index fund that would still include technology, but not the FAANG stocks? I know I can build something close by using sector MF's or ETF's, but searching to see if anyone has suggestions for a single fund.
Bogleheads:

Please keep this topic about "The Three-Fund Portfolio."

Thank you and best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
Fair enough. I could rephrase the question pointing out that my TSM is among my three-funds, but I was trying to be more specific so that I could reduce my risk among my three-funds.
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Does anyone purposefully practice 2 fund portfolio (IE: VT/BNDW) in taxable and purposefully forgo the foreign tax credits in lieu of simplicity/less ability to stray from total world market?

One thing I have learned over the last few years is I can be a tinkerer, so simplicity (one equity fund) for my 3 fund portfolio allocation is healthy.
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Re: The Three-Fund Portfolio

Post by permport »

I love the simplicity of the Three-Fund Portfolio. I am currently now invested in a simple Vanguard Balanced Fund. It is a 60/40 allocation that actually has more than three underlying funds, but I think it is still in keeping with the "spirit" of the Three-Fund strategy.
Buy right and hold tight.
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Re: The Three-Fund Portfolio

Post by bertilak »

permport wrote: Sun Jan 10, 2021 11:29 am I love the simplicity of the Three-Fund Portfolio. I am currently now invested in a simple Vanguard Balanced Fund. It is a 60/40 allocation that actually has more than three underlying funds, but I think it is still in keeping with the "spirit" of the Three-Fund strategy.
If you have a taxable account the all-in-one funds can present a problem. If you ever change your mind and want a different AA the simplest way to do this (and stay in a single fund) is to sell the whole fund and buy another. This can be a big tax hit. If you have the three-fund portfolio you can adjust by selling and buying only (small) parts of the portfolio. This is much less of a tax hit.

Another possibility is to sell part of the all-in-one fund and use the proceeds to buy a single asset class, thereby adjusting the overall AA, but now you have multiple funds that are a bit more complex to manage than the three fund portfolio. Your original single-fund portfolio starts getting messy.

In a tax advantaged account this is not a problem but as time goes by you may need to expand into a taxable account.
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Re: The Three-Fund Portfolio

Post by permport »

bertilak wrote: Sun Jan 10, 2021 11:45 am
permport wrote: Sun Jan 10, 2021 11:29 am I love the simplicity of the Three-Fund Portfolio. I am currently now invested in a simple Vanguard Balanced Fund. It is a 60/40 allocation that actually has more than three underlying funds, but I think it is still in keeping with the "spirit" of the Three-Fund strategy.
If you have a taxable account the all-in-one funds can present a problem. If you ever change your mind and want a different AA the simplest way to do this (and stay in a single fund) is to sell the whole fund and buy another. This can be a big tax hit. If you have the three-fund portfolio you can adjust by selling and buying only (small) parts of the portfolio. This is much less of a tax hit.

Another possibility is to sell part of the all-in-one fund and use the proceeds to buy a single asset class, thereby adjusting the overall AA, but now you have multiple funds that are a bit more complex to manage than the three fund portfolio. Your original single-fund portfolio starts getting messy.

In a tax advantaged account this is not a problem but as time goes by you may need to expand into a taxable account.
That's a perfectly valid concern. My overall plan is to hold 60/40 for life.
Buy right and hold tight.
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Taylor,

What do you think of VTSAX-type funds outside of Vanguard, where you aren't holding the actual shares, but a contract to own the rights of the shares? Vanguard seems to have a unique ownership structure which makes their mutual funds appealing.

For example, owning SWTSX at Schwab vs. VTSAX at Vanguard.
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Re: The Three-Fund Portfolio

Post by abuss368 »

HRG wrote: Sun Jan 10, 2021 11:00 am
Taylor Larimore wrote: Sun Jan 10, 2021 10:04 am
HRG wrote: Sun Jan 10, 2021 7:57 am My largest holding is the TSM index fund. Being that technology makes up 26% of the TSM, and the FAANG stocks make up the bulk of that sector, does anyone have a recommendation for another index fund that would still include technology, but not the FAANG stocks? I know I can build something close by using sector MF's or ETF's, but searching to see if anyone has suggestions for a single fund.
Bogleheads:

Please keep this topic about "The Three-Fund Portfolio."

Thank you and best wishes.
Taylor
Jack Bogle's Words of Wisdom: "There may be better investment strategies than owning just three broad-based index funds but the number of strategies that are worse is infinite."
Fair enough. I could rephrase the question pointing out that my TSM is among my three-funds, but I was trying to be more specific so that I could reduce my risk among my three-funds.
In my opinion, changing the Three Fund Portfolio strategy by “adding another index” or using “sector funds” increases the overall risk to the portfolio. The investor is introducing a risk to the portfolio that may or may not pay off.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: The Three-Fund Portfolio

Post by abuss368 »

manlymatt83 wrote: Sun Jan 10, 2021 4:09 pm Taylor,

What do you think of VTSAX-type funds outside of Vanguard, where you aren't holding the actual shares, but a contract to own the rights of the shares? Vanguard seems to have a unique ownership structure which makes their mutual funds appealing.

For example, owning SWTSX at Schwab vs. VTSAX at Vanguard.
I do not know what owning the contract to own the rights means. Options? Holding a very low cost total market index funds (US, International, Bonds) from Vanguard, Fidelity, and Schwab is fine and will do the job!

The alternatives that are worse are infinite.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: The Three-Fund Portfolio

Post by abuss368 »

permport wrote: Sun Jan 10, 2021 11:58 am
That's a perfectly valid concern. My overall plan is to hold 60/40 for life.
Asset allocation is the most important decision that we can make as investors.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Taylor Larimore
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Re: The Three-Fund Portfolio

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manlymatt83 wrote: Sun Jan 10, 2021 4:09 pm Taylor,

What do you think of VTSAX-type funds outside of Vanguard, where you aren't holding the actual shares, but a contract to own the rights of the shares? Vanguard seems to have a unique ownership structure which makes their mutual funds appealing.

For example, owning SWTSX at Schwab vs. VTSAX at Vanguard.
manlymatt83:

I believe SWTSX (Schwab Total Stock Market Index Fund) is an excellent substitute for VTSAX (Vanguard Total Stock Market Index Fund.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Taylor Larimore wrote: Sun Jan 10, 2021 5:52 pm
manlymatt83 wrote: Sun Jan 10, 2021 4:09 pm Taylor,

What do you think of VTSAX-type funds outside of Vanguard, where you aren't holding the actual shares, but a contract to own the rights of the shares? Vanguard seems to have a unique ownership structure which makes their mutual funds appealing.

For example, owning SWTSX at Schwab vs. VTSAX at Vanguard.
manlymatt83:

I believe SWTSX (Schwab Total Stock Market Index Fund) is an excellent substitute for VTSAX (Vanguard Total Stock Market Index Fund.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk."
And what do you think of SWISX in lieu of VTIAX for fund #2? The former holds no emerging markets. :-(
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Re: The Three-Fund Portfolio

Post by Taylor Larimore »

And what do you think of SWISX in lieu of VTIAX for fund #2? The former holds no emerging markets. :-(
manlymatt83:

I don't know if including emerging markets will help or hurt a total international index fund. At my recommended 20% of total stocks in international stocks it won't make much difference.

Try not to "overthink" your portfolio. No one knows what funds and allocations will be best except in hindsight. Just stick to 2 or 3 total market index funds and you are virtually certain to outperform most investors.

Suggestion: It is always helpful to spell-out fund names. No one has memorized all the ticker symbols.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Selecting funds that will significantly exceed market returns, a search in which hope springs eternal and in which past performance has proven of virtually no predictive value, is a loser’s game.”
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: The Three-Fund Portfolio

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abuss368 wrote: Sun Jan 10, 2021 5:17 pm
permport wrote: Sun Jan 10, 2021 11:58 am
That's a perfectly valid concern. My overall plan is to hold 60/40 for life.
Asset allocation is the most important decision that we can make as investors.

Tony
Why is it the hardest?? There are always posts about it, different ideas, several "rules of thumb", and we always seem to be "tweaking" it. I read a post that a guy rebalanced his portfolio 4-times since April 2020. I start thinking that I'm missing some fundamental somewhere and start panicking. The Vanguard site has a suggested asset allocation model based on investor input. Pretty close to the "age rule".
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Re: The Three Fund Portfolio

Post by Taylor Larimore »

umfundi wrote: Mon Jan 02, 2012 10:55 pm Taylor,

Thank you for your thoughtful reply.

I asked about back testing simply so I could understand the past performance of various recommendations.

I put no credence into notions of "Reversion To The Mean" as you reference Jack Bogle, nor to "Momentum" as Larry Swedroe sometimes seems to want to believe in.

I am very interested in simplifying my choices, and I thank you for that.

Is there someone in particular at Vanguard that we should thank for continuing and expanding Jack Bogle's vision?

Best wishes,

Keith
Keith:

I am concerned that Vanguard's leadership may lose Mr. Bogle's vision. However, I have no communication with Vanguard executives so cannot help.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Vanguard's unique mutual structure and our low-cost, index-focused strategy suggest that our reign will be far more sustainable than those of the three earlier leaders of the fund industry."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Last question on this and I should be good to go.

If I want to hold VTI and VXUS in taxable, and VT in tax advantaged, can I also hold some VTI and VXUS in tax advantaged to balance out holdings in the taxable as needed? Or is that too risky due to wash sales? Or should I just be extra careful?
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Re: The Three-Fund Portfolio

Post by cos »

manlymatt83 wrote: Thu Jan 14, 2021 9:14 pm Last question on this and I should be good to go.

If I want to hold VTI and VXUS in taxable, and VT in tax advantaged, can I also hold some VTI and VXUS in tax advantaged to balance out holdings in the taxable as needed? Or is that too risky due to wash sales? Or should I just be extra careful?
The return on such efforts is likely to be very low. Don't overcomplicate your investments. Keep it simple and stay the course.
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Re: The Three-Fund Portfolio

Post by Duckie »

manlymatt83 wrote:]If I want to hold VTI and VXUS in taxable, and VT in tax advantaged, can I also hold some VTI and VXUS in tax advantaged to balance out holdings in the taxable as needed? Or is that too risky due to wash sales?
You could always hold equivalent ETFs that follow a different index. For US stock consider ITOT, SCHB, or IWV. For international consider IXUS or VEU.
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Duckie wrote: Fri Jan 15, 2021 5:09 pm
manlymatt83 wrote:]If I want to hold VTI and VXUS in taxable, and VT in tax advantaged, can I also hold some VTI and VXUS in tax advantaged to balance out holdings in the taxable as needed? Or is that too risky due to wash sales?
You could always hold equivalent ETFs that follow a different index. For US stock consider ITOT, SCHB, or IWV. For international consider IXUS or VEU.
Good idea, thank you!
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Duckie wrote: Fri Jan 15, 2021 5:09 pm
manlymatt83 wrote:]If I want to hold VTI and VXUS in taxable, and VT in tax advantaged, can I also hold some VTI and VXUS in tax advantaged to balance out holdings in the taxable as needed? Or is that too risky due to wash sales?
You could always hold equivalent ETFs that follow a different index. For US stock consider ITOT, SCHB, or IWV. For international consider IXUS or VEU.
So SCHB and IXUS would be good TLH partners to VTI and VXUS?
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Re: The Three-Fund Portfolio

Post by ashg »

I am a newbie to investment. I am assuming that 3 Fund strategy mean holding all 3 funds in overall portfolio across accounts should have 3 funds allocated as per asset allocation. And it is not necessary to have all 3 funds in each account. Right?
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Re: The Three-Fund Portfolio

Post by Duckie »

manlymatt83 wrote:So SCHB and IXUS would be good TLH partners to VTI and VXUS?
Yes.
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Re: The Three-Fund Portfolio

Post by Duckie »

ashg wrote:I am assuming that 3 Fund strategy mean holding all 3 funds in overall portfolio across accounts should have 3 funds allocated as per asset allocation. And it is not necessary to have all 3 funds in each account. Right?
Right.
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Re: The Three-Fund Portfolio

Post by ashg »

Duckie wrote: Fri Jan 15, 2021 6:32 pm
ashg wrote:I am assuming that 3 Fund strategy mean holding all 3 funds in overall portfolio across accounts should have 3 funds allocated as per asset allocation. And it is not necessary to have all 3 funds in each account. Right?
Right.
Thanks! Is there any benefit to using Mutual funds vs ETFs for 3-Fund strategy?
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Re: The Three-Fund Portfolio

Post by sycamore »

ashg wrote: Fri Jan 15, 2021 6:38 pm Is there any benefit to using Mutual funds vs ETFs for 3-Fund strategy?
In regards to the 3-Fund strategy, it doesn't matter if you use ETFs or mutual funds.

Use whichever you prefer. See the Boglehead wiki article https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds for some discussion.
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Re: The Three Fund Portfolio

Post by abuss368 »

Taylor Larimore wrote: Thu Jan 14, 2021 8:51 pm
I am concerned that Vanguard's leadership may lose Mr. Bogle's vision. However, I have no communication with Vanguard executives so cannot help.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Vanguard's unique mutual structure and our low-cost, index-focused strategy suggest that our reign will be far more sustainable than those of the three earlier leaders of the fund industry."
Hi Taylor -

I agree and am concerned as well. There appears to be a lot of changes to Vanguard over the past couple of years. What I also find disappointing is the fact that the Vanguard website does not have a dedicated Jack Bogle section. I though perhaps when Mr. Bogle passed on, the website has a small section. It would have been so nice to grow that and include Mr. Bogle’s speeches and articles.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: The Three Fund Portfolio

Post by Triple digit golfer »

abuss368 wrote: Sat Jan 16, 2021 7:10 am
Taylor Larimore wrote: Thu Jan 14, 2021 8:51 pm
I am concerned that Vanguard's leadership may lose Mr. Bogle's vision. However, I have no communication with Vanguard executives so cannot help.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Vanguard's unique mutual structure and our low-cost, index-focused strategy suggest that our reign will be far more sustainable than those of the three earlier leaders of the fund industry."
Hi Taylor -

I agree and am concerned as well. There appears to be a lot of changes to Vanguard over the past couple of years. What I also find disappointing is the fact that the Vanguard website does not have a dedicated Jack Bogle section. I though perhaps when Mr. Bogle passed on, the website has a small section. It would have been so nice to grow that and include Mr. Bogle’s speeches and articles.

Tony
I'm not concerned. Mr. Bogle's vision was incredibly simple and can be implemented simply by using a couple of index funds that are available basically everywhere. That's the beauty of his vision. You don't need to rely on any executives or managers to do anything. You just need a couple of low cost index funds.
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abuss368
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Re: The Three Fund Portfolio

Post by abuss368 »

Triple digit golfer wrote: Sat Jan 16, 2021 7:12 am
abuss368 wrote: Sat Jan 16, 2021 7:10 am
Taylor Larimore wrote: Thu Jan 14, 2021 8:51 pm
I am concerned that Vanguard's leadership may lose Mr. Bogle's vision. However, I have no communication with Vanguard executives so cannot help.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Vanguard's unique mutual structure and our low-cost, index-focused strategy suggest that our reign will be far more sustainable than those of the three earlier leaders of the fund industry."
Hi Taylor -

I agree and am concerned as well. There appears to be a lot of changes to Vanguard over the past couple of years. What I also find disappointing is the fact that the Vanguard website does not have a dedicated Jack Bogle section. I though perhaps when Mr. Bogle passed on, the website has a small section. It would have been so nice to grow that and include Mr. Bogle’s speeches and articles.

Tony
I'm not concerned. Mr. Bogle's vision was incredibly simple and can be implemented simply by using a couple of index funds that are available basically everywhere. That's the beauty of his vision. You don't need to rely on any executives or managers to do anything. You just need a couple of low cost index funds.
That is true. I am reading Mr. Bogle’s “Common Sense on Mututal Funds - Updated”. Amazing how much one grabs the second time around.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Working through my checklist... individual stocks sold :beer ... etc.

Curious, is there any room for covered calls / cash secured puts in 3-fund portfolio land? If not, I may close out my options account such that I'm not tempted to sell covered calls against my holdings during down times. I've wasted a lot of money over the years buying puts as a hedge for a crash that never came (for example).
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Re: The Three-Fund Portfolio

Post by bertilak »

manlymatt83 wrote: Sat Jan 16, 2021 5:22 pm Working through my checklist... individual stocks sold :beer ... etc.

Curious, is there any room for covered calls / cash secured puts in 3-fund portfolio land? If not, I may close out my options account such that I'm not tempted to sell covered calls against my holdings during down times. I've wasted a lot of money over the years buying puts as a hedge for a crash that never came (for example).
About 10 years ago I dabbled in options -- puts and calls, including some semi-esoteric strategies: spreads, straddles, etc.. I gave up on that because it was a lot of work for very little reward -- a tough (and unreliable) way to make money.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: The Three-Fund Portfolio

Post by Aurea »

Thank you for this. I also feel that the way I was tought to always be keen is taking too much effort than I am willing to invest.
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Re: The Three-Fund Portfolio

Post by csei21 »

I don't know if including emerging markets will help or hurt a total international index fund. At my recommended 20% of total stocks in international stocks it won't make much difference.

Try not to "overthink" your portfolio. No one knows what funds and allocations will be best except in hindsight. Just stick to 2 or 3 total market index funds and you are virtually certain to outperform most investors.
Thank for this advice- I am setting a taxable account at Schwab and read different advice on how to use Schwab funds to make a 3 fund portfolio (Are 5 funds critical for full int'l coverage or is the 3 Schwab fund strategy recommended in the Wiki better because of simplicity?)

Are there any downsides to buying Vanguard ETFs at Schwab? Since there are no trading fees for ETFs?

So for a taxable account :

Vanguard Total Stock Market Index Fund: VTI
Vanguard Total International Stock Index Fund: VXUS
Vanguard Intermediate Tax-Exempt Bond Fund: VWITX

Or :
US Broad Market ETF (SCHB)
International Equity Index ETF (SCHF)
VWITX or ? ( I didn't see a Schwab tax exempt bond fund with a low ER)

I have Vanguard Target Date fund in my 401K and Roth.

Schwab tried to sell their Intelligent Portfolios but thanks to the Bogleheads book and forum I am getting confident enough to set up a simple portfolio on my own : )
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One company or more?

Post by Taylor Larimore »

csei21:

Try to hold all your mutual funds in one good company. The advantages are many:

1. You know the company holding your life savings has strength, honesty, and integrity.

2. Many experts believe that "expense" is the most important criteria in selecting funds. You know you always have this advantage working for you.

3. Service is important. It will be much easier to get all advice from someone familiar with their funds.

4. We like a good web-site. Vanguard', Fidelity and Schwab are more than adequate. With a simple portfolio you should not need "research and tools." Simply use one company's annual statement.

5. Premium Service: Consolidating everything can results in eligibility for premium and lower cost services. It's Admiral, Voyager, and Flagship service at Vanguard. Representatives appreciate loyalty, and respond accordingly.

6. Fund selection. Fidelity, Schwab and Vanguard each have over 100 funds. You can't understand them all.

7. Company knowledge: By concentrating on one company, we can much better learn fund details, including: fee's, past returns, risk, manager changes, etc.

8. Exchanges and other transactions are easier.

9. One company statement.

10. In event of disability or death, it will be much easier for caregivers and survivors if they have only one company to deal with.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "We ignore the real diamonds of simplicity, seeking instead the illusory rhinestones of complexity."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: One company or more?

Post by bertilak »

Taylor Larimore wrote: Tue Jan 19, 2021 10:12 am csei21:

Try to hold all your mutual funds in one good company. The advantages are many:
Amen.

That long list of advantages can be boiled down to "keep it simple" which is a VERY important concept. With things scattered all over it is hard to know just what your situation is.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: The Three-Fund Portfolio

Post by Brianmcg321 »

manlymatt83 wrote: Tue Jan 05, 2021 2:04 pm What do y'all think of VIVLX in an individual investment account?
I don't like target date funds in general, and especially in a taxable account. They are not very tax efficient. There is a lot of rebalancing and bonds that you have to pay taxes on.
I simple total market index would be best for a taxable acccount.
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Re: The Three-Fund Portfolio

Post by manlymatt83 »

Really loved this quote at the end of Larry Swedroe’s book, the incredible shrinking alpha:
While it is a tragedy that the majority of individual investors unnecessarily miss out on market returns that are available to anyone adopting a passive investment strategy, the truly great tragedy is that they also miss out on the important things in life in pursuit of the Holy Grail of outperformance. Our fondest wish is that this book has led you to the winner’s game in both investing and, far more importantly, life.
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