I've always done 1 fund but been thinking whether I should do a 2 or 3 fund. Your thoughts but my mind at ease, I'm sticking with 1 fund for at least another 10 years
Even though I am near retirement, I am 100% Fidelity S&P 500 (401K at work). I am leaning towards Warren Buffet's 2-Fund - 90% S&P 500 and 10% Short-Term Treasury. The other portfolio is JL Collins - 75% Total Stock Market, 25% Total Bond Market.
On my retirement I'm 90/10 and will end with 70/30 @ 65 year of age. My personal funds I will do the buffet mix as well. Go with 100 all the way until 5 years before retirement
Just an engagement comment. Been catching up on your channel as well as Erin Talks Money and am sad you both haven't gotten more traction on the platplatform. Keep up the great content.
Tae, as always, great content! It would be very interesting to see a similar analysis but instead of $10,000 one time we see the outcome of a consistent amount invested per year or per month. Fluctuations in when the good years happen and the bad years happen with investment over time which is how most people save
I definitely like the idea of a 3-fund portfolio. In addition to having no idea what state the U.S. will be in with respect to the rest of the world, it’s just really fun to think I have shares in Toyota, Shell, and Samsung through my international index fund.
VT would give you US and international in one fund for 0.07%. AVGE would give you that plus small cap and some REITs. Expense ratio 0.23%. Simple and no need to rebalance. AVGE is still too new to backtest.
But volatility is irrelevant if your strategy is buy and hold the position. As soon as the fund nosedives you allocate more and more to that position. Eventually the price of the shares will go up.
@@lazyidealist FGDRX Fidelity growth company actively manage fund is a fund I've held for many years. It has way outperformed any index fund. I'm not against index funds, I own a total market and s&p 500. Im just saying its not always about the expense ratio, its about the returns after fees. Portfolio visualizer is a great free online program to use to compare funds.
@@lazyidealist FDGRX Fidelity Growth Company mutual fund is an actively managed fund that I have owned for years. It has far outperformed index funds. I'm not against index funds, I own a total stock market and S&P index funds and they are great funds. FDGRX has an expense ratio of .8 but even with that it has way outperformed them.
Love your videos. Would love to see you cover REITs since some advocate for a small allocation in that asset class as well as asset allocation over time since many think target date funds are too conservative.
Great video! Question on the cost claim, though: for a three fund portfolio, it is true that you're paying expenses on three funds, but each fund is now less than 100%. Hence, is it true that the total expenses on a three fund portfolio are actually higher? Unless I'm missing something, the three fund portfolio will have the same expenses as the one fund, assuming the three funds all have the same expense ratio as the one fund.
Does my plan sound good? Im 34 and late to investing and trying to catch up. My plan is to try and max out my VOO in my Roth IRA. And roll over what little i have in my brokerage 401k into my bigger brokerage Roth 401k and contribute up to my companies small match. The main question i have is, since i started investing late at 34 years old, i think i should condense my portfolio to get larger compound growth. So moving from a 3 fund portfolio to a 2 fund portfiolo. But should my second fund in my roth 401k continue to be just VIGAX for growth index or SCHD since it has little overlap with VOO? And/or what would be a better 2 fund combo out of these 3? And do i have them in the best accounts given the fund type? Thank you so much for helping us all! 🙂
I thought the 3-fund portfolio consists of 70% U.S. Stock, 20% International Stock and 10% U.S. Bonds. You said 20% U.S.Bonds instead of International Stock. Your 3-fund portfolio is safer with slightly less projected gains.
VTSAX, which Mr. Kim recommends, is good even in a taxable account because there is very little turnover on the individual stock, therefore lower tax liability compared to a more actively traded fund.
@@ericfleet9602 Yes, you are correct. VTSAX and VTIAX are fine in a taxable account. Problem is I'm not sure what to do when I want/need to add bonds? Many bond funds are terrible tax wise to keep in a taxable account. I also don't want bond funds taking up space in an IRA. I want an IRA to grow as large as possible because it is tax free. There are municipal bond funds that are more tax efficient but I read they can effect the taxation on social security benefits later on. It's complicated and I wish Mr. Kim would make a video on this. He always talks about the 3-Fund Portfolio but never discusses its possible tax consequences.
In my opinion, age doesn't really matter, what matters is when are you going to retire or otherwise stop receiving earned income. You would probably do well with the 1-fund strategy. I just turned 50 and plan to work for about another 15 years. I'm about to switch my Fidelity 401k account to 1-fund, FXAIX , Fidelity 500 Index Fund which has an expense ratio of 0.015%. I might add a bond fund when I get about 5 years close to retirement and may follow Buffet's advice and put 10% of my portfolio in that bond fund.
