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The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

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The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk Hardcover – July 3, 2018

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Twenty benefits from the three-fund total market index portfolio.  

The Bogleheads’ Guide to The Three-Fund Portfolio describes the most popular portfolio on the Bogleheads forum. This all-indexed portfolio contains over 15,000 worldwide securities, in just three easily-managed funds, that has outperformed the vast majority of both professional and amateur investors.

If you are a new investor, or an experienced investor who wants to simplify and improve your portfolio, The Bogleheads’ Guide to The Three-Fund Portfolio is a short, easy-to-read guide to show you how.

  • Print length 112 pages
  • Language English
  • Publisher Wiley
  • Publication date July 3, 2018
  • Dimensions 5.6 x 0.6 x 8.6 inches
  • ISBN-10 9781119487333
  • ISBN-13 978-1119487333
  • See all details

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The Bogleheads' Guide to Investing

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From the inside flap.

  • Eliminate a large handful of risks associated with other investing methods, including manager choice, individual stock and sector vulnerabilities, tracking error, and more
  • Avoid the most common ways investors lose money trying to make it, including stock picking, market timing, useless newsletters, and expensive advisors
  • Prepare yourself to invest real money by hearing from a diverse collection of everyday investors successfully using the approach, including model allocation strategies and tips

Follow the simple path to financial security in The Bogleheads' Guide to the Three-Fund Portfolio.

From the Back Cover

  • A five-step solution to securing wealth in Bull and Bear Markets
  • Actionable plans for capturing more market returns than many professional investors
  • Insights and commentary from celebrated and everyday Boglehead investors

Discover the stress-free approach to reaching your financial goals with The Bogleheads' Guide to the Three-Fund Portfolio.

About the Author

TAYLOR LARIMORE is a sage on the Boglehead forums for everyone who wants to discover "the Boglehead way." Crowned the "King of the Bogleheads" by Jack Bogle, he has spent more than seven decades in finance and investing, in such positions as revenue officer for the IRS, chief of the Financial Division for the Small Business Administration in South Florida, and a director of the Dade County Housing Finance Authority. He is co-author of The Bogleheads' Guide to Investing and The Bogleheads' Guide to Retirement Planning.

Product details

  • ASIN ‏ : ‎ 1119487331
  • Publisher ‏ : ‎ Wiley; 1st edition (July 3, 2018)
  • Language ‏ : ‎ English
  • Hardcover ‏ : ‎ 112 pages
  • ISBN-10 ‏ : ‎ 9781119487333
  • ISBN-13 ‏ : ‎ 978-1119487333
  • Item Weight ‏ : ‎ 8.8 ounces
  • Dimensions ‏ : ‎ 5.6 x 0.6 x 8.6 inches
  • #21 in Mutual Funds Investing (Books)
  • #112 in Stock Market Investing (Books)
  • #266 in Introduction to Investing

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Bogleheads University is a collection of presentations illustrating Bogleheads Principles of Investing which provide a framework for understanding the basics, in addition to coverage of more advanced topics such as Social Security, retirement tax planning and real estate and factor investing.

2023 - Bogleheads 101: Basics

2023 - Bogleheads 501: Advanced

2022 - 10 Core Principles

5 Steps to Take Before You Begin Investing with Christine Benz

Christine Benz discusses how to set savings goals, manage human capital, establish an emergency fund, determine whether to pay down debt or invest, and create a budget. 

The Basics of Investing with Allan Roth

Allan Roth covers key investing concepts, including the relationship between risk and return, the benefits of diversification, active versus passive management, and the pitfalls of market-timing. 

Investment Selection with Rick Ferri

Rick Ferri provides an overview of key investment types and discusses the virtues of using index funds for the core of a portfolio. He also shares the Bogleheads' investing philosophy. 

Introduction to Roth IRA, 401(k), and Other Retirement Accounts with Mike Piper

Mike Piper provides a basic introduction to the rules regarding the most common types of tax-advantaged accounts, such as Roth IRA, traditional IRA, 401(k), HSA, etc.

Setting Your Asset Allocation

Christine Benz discusses the two key factors to bear in mind when setting an asset allocation: risk capacity and risk tolerance. She also shares some case studies of appropriate asset allocations for retirement and non-retirement goals. 

Examples of Asset Allocations: Reasonable and Unreasonable

Jim Dahle shares the characteristics of "reasonable" portfolios, as well as specific examples of reasonable and unreasonable portfolios. 

Minimizing Taxes on Your Investments with Mike Piper

Mike Piper discusses the three most important things you can do to minimize the taxes that you pay on your investment returns.

Investing Basics Q&A

In a session led by Karen Damato, Christine Benz, Mike Piper, and Allan Roth field questions on asset allocation, investment selection, and tax considerations.

Social Security Rules and Strategies with Mary Beth Franklin

Mary Beth Franklin discusses the ways that claiming age, marital status, and earnings affect the amount of Social Security you receive. Franklin also shares claiming strategies to maximize benefits.

Retirement Portfolio Designs with Dana Anspach

Dana Anspach discusses the importance of defining your goals when investing, sequence risk and dollar-weighted returns, and reviews various strategies for investing in retirement – including income ladders and supplementing a portfolio with an annuity.

Roth Conversion and Retirement Tax Planning with Wade Pfau

Wade Pfau shares strategies for minimizing your taxes in retirement, through managing your tax rates and strategic use of Roth conversions.

Dr. Jim Dahle on Real Estate Investing

Jim Dahle discusses the case for (private) real estate, the case for overweighting real estate, and the various types of real estate investments.

The Case for Factor Investing with Paul Merriman

Paul Merriman discusses the past performance of the last 90+ years when investing in small-cap value stocks, examining both absolute return, and relative performance when U.S. large-cap stocks underperformed.

The Case Against Factor Investing with Rick Ferri

Rick Ferri discusses what drives investment portfolio returns (beta), adding factor strategies to a total market portfolio, tracking error from targeting factor premiums, the importance of having a long investment horizon (25+ years), fees (hurdle rate), lack of premiums ex-post, behavioral risk, mean regression and more.

Advanced Q&A at the 2023 Bogleheads Conference

In a session led by Jim Dahle, Dana Anspach, Rick Ferri, Mary Beth Franklin, Paul Merriman and Wade Pfau field questions on social security, real estate, factor investing and retirement tax planning.

Principle 1 - Develop a Workable Plan

Author and White Coat Investor founder Jim Dahle kicks off the first Bogleheads University with an exploration of the first Bogleheads principle: Develop a Workable Plan. He covers the importance of setting financial goals, investing in various investment accounts, and finding an appropriate asset allocation.

Principle 2 - Invest Early and Often

Morningstar director of personal finance Christine Benz tackles Bogleheads Principle #2: Invest Early and Often. She covers the importance of investing as soon as you possibly can - even if that means investing a fairly small sum. She then explores lump-sum investing versus dollar-cost averaging (investing often) - and the pros and cons of each. 

Principle 3 - Never Bear Too Much or Too Little Risk

Financial advisor and author Allan Roth covers Bogleheads Principle #3: Never Bear Too Much or Too Little Risk. He discusses how to select investments that are appropriate given your goals, time horizon, and risk tolerance. 

Principle 4 - Diversify

Morningstar director of personal finance Christine Benz covers Bogleheads Principle #4: Diversify. She explores the advantages of index funds and exchange-traded funds for investors at all life stages, and shares how the 3-fund portfolio (consisting of Total Stock Market, Total International Stock, and Total Bond Market) is exceptionally well diversified. 

Principle 5 - Never Try to Time the Market

Financial advisor and author Rick Ferri tackles Bogleheads Principle #5: Don't Try to Time the Market. He shares data showing how investors often hurt their results with poor timing decisions and discusses how investors can put in place a plan that requires relatively little ongoing maintenance. 

Principle 6 - Use Index Funds When Possible

Financial advisor and author Rick Ferri discusses Bogleheads Principle #6: Use Index Funds When Possible. He shares data pointing to the performance edge that index funds hold in most major categories and the risks that investors court by emphasizing actively managed funds. 

Principle 7 - Keep Costs Low

Financial advisor and author Allan Roth tackles Bogleheads Principle #7: Keep Costs Low. He discusses the gamut of costs that investors pay: expense ratios for their funds, transaction costs, advice costs, tax costs, and the cost of poor timing decisions. 

Principle 8 - Minimize Taxes

Tax and Social Security expert Mike Piper covers Bogleheads Principle #8: Minimize Taxes. He shares key ways to minimize investment-related taxes, including maximizing contributions to tax-sheltered accounts, investing tax-efficiently within taxable accounts, and paying attention to "asset location." 

Principle 9 - Invest with Simplicity

Tax and Social Security expert Mike Piper tackles Bogleheads Principle #9: Invest with Simplicity. He discusses how investors in multi-asset funds often do a better job of capturing their funds' returns than in investors in other fund types. 

Principle 10 - Stay the Course

Author and White Coat Investor founder Jim Dahle discusses Bogleheads Principle #10: Stay the Course. He looks at how investors can undermine their own results with too-frequent buying and selling, including chasing hot performers. 

Q&A with the five faculty members

Bogleheads University "faculty members" tackle attendee questions. They discuss investing in an inflationary environment, setting up bucket portfolios for retirement, lump sum versus dollar-cost averaging, and potential undervaluation in non-U.S. stocks. The panel discussion includes Christine Benz, Jim Dahle, Rick Ferri, Mike Piper, and Allan Roth. 

ORGANIZATION, MISSION, VISION, VALUES

The John C. Bogle Center for Financial Literacy is a non-profit organization dedicated to improving financial literacy. We were approved by the IRS as a 501(c)(3) public charity on February 6, 2012. The approval was retroactive to November 22, 2010, the date of the organization's incorporation as a non-profit Texas Corporation.

To expand John C. Bogle's legacy by promoting the principles of successful investing and financial well-being through education and community.

Create a world of well-informed, capable, and empowered investors.

  • Commitment to and focus on the investment philosophy of John C. Bogle.
  • Community: The maintenance and expansion of the well-established Boglehead sense of community and belonging.
  • Fairness: That investment companies should treat investors equitably so that investors receive their fair share of investment returns.
  • Focus: Highlighting quantitative evidence-based research .
  • Simplicity: That investing can and should be simple.
  • Stewardship: Advocating for and supporting servant leadership dedicated to the benefit of investors.

Copyright ©  2024   The John C. Bogle Center for Financial Literacy . All Rights Reserved.     |     Terms of Service      |     Privacy Policy      |      Sitemap

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Opinion: A Boglehead explains the simplest way to manage your money

Silvia ascarelli, just use 3 basic mutual funds, not this way....

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Taylor Larimore is a big advocate of keeping investing simple — simple enough to be handled with just three mutual funds. He says it means he doesn’t need to spend more than about an hour a year managing his money.

Larimore is also one of the founders of Bogleheads, a passionate community of investors inspired by Vanguard founder Jack Bogle. The forum’s members discuss investment advice online and organize meetups in some areas. The three-fund-portfolio is one of the most popular discussion topics.

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Bogleheads 3 and 4 Fund Portfolio: Backtest and Performance Analysis

Jack Bogle’s famous advice was to avoid searching for individual stocks, sectors, or markets that may perform better and simply invest in the entire market. This means using index funds to build a diversified portfolio. The Bogleheads 3 Fund Portfolio (global stocks, U.S. bonds) and Bogleheads 4 Fund Portfolio (global stocks, global bonds) are good examples of the approach. Let’s find out what they are about.

Boglehead 3 Fund Portfolio is a simple, low-cost investment strategy that consists of three index funds: a U.S. Total Stock Market Index Fund, an International Stock Market Index Fund, and a U.S. Total Bond Market Index Fund. Boglehead 4 Fund Portfolio adds Total International Bond Market Index Fund to the mix. Both portfolios aim to provide diversification and long-term growth, with a focus on minimizing costs .

In this post, we take a look at the Bogleheads 3 Fund Portfolio (global stocks, U.S. bonds) and Bogleheads 4 Fund Portfolio (global stocks, global bonds). We end the article with backtests of both portfolios.

Table of contents:

What is the Bogleheads 3 Fund Portfolio?

The Bogleheads 3 Fund Portfolio is a low-cost investment strategy that was popularized by the Bogleheads, a group of investors who follow the philosophy of investing legend Jack Bogle. The strategy involves investing in three index funds that provide broad exposure to the stock and bond markets. The three funds are:

  • U.S. Total Stock Market Index Fund : This fund provides exposure to the entire U.S. stock market, including small, mid, and large-cap stocks.
  • International Stock Market Index Fund : This fund provides exposure to stocks in developed and emerging markets outside of the U.S.
  • U.S. Total Bond Market Index Fund : This fund provides exposure to the entire U.S. bond market, including government and corporate bonds.

The Bogleheads 3 Fund Portfolio is designed to be a simple, low-cost, and diversified investment strategy. By investing in the three funds, investors can potentially capture the long-term growth of the stock and bond markets while reducing the risks associated with investing in individual stocks or bonds. The strategy is based on the idea of “buy and hold” investing, which involves making regular contributions to the portfolio and holding the investments for the long term.

How to Invest in a Bogleheads 3 Fund Portfolio

To invest in a Bogleheads 3 Fund Portfolio, follow these steps:

  • Open a brokerage account : Open an account with a brokerage firm that offers the index ETFs you need to construct your portfolio.
  • Choose your funds : Select a U.S. Total Stock Market Index Fund (such as Vanguard Total Stock Market- VTI), an International Stock Market Index Fund (such as Vanguard FTSE All-World ex-US – VEU), and a U.S. Total Bond Market Index Fund (Vanguard Total Bond Market – BND).
  • Determine your asset : Decide how much of your portfolio you want to allocate to each of the three funds. A common allocation is to have 50% of your portfolio invested in the U.S. stock market, 30% invested in the international stock market, and 20% invested in bonds.
  • Start investing : Start by investing a lump sum or setting up a regular contribution plan. If you’re starting with a small amount, consider using dollar-cost averaging to reduce the impact of market volatility.
  • Monitor and rebalance : Over time, the values of your index funds may change and your asset allocation may become imbalanced. Consider periodically rebalancing your portfolio to maintain your target allocation.

What are the Benefits of a Bogleheads 3 Fund Portfolio?

The Bogleheads 3 Fund Portfolio has several benefits, including:

  • Diversification : The portfolio provides exposure to multiple asset classes and markets, reducing the risk of investing in any one individual stock or market.
  • Low costs : By investing in low-cost index funds, investors can minimize the impact of expenses on their returns. This can result in a higher return over the long term.
  • Ease of use : The Bogleheads 3 Fund Portfolio is simple and straightforward, making it easy for investors to understand and implement.
  • Long-term growth potential : The strategy is based on the idea of “buy and hold” investing, which can potentially provide long-term growth for investors.
  • Consistency : The strategy is consistent with the philosophy of investing legend Jack Bogle, who advocated for low-cost and diversified investing.

What are the Risks Involved with a Bogleheads 3 Fund Portfolio?

While a Bogleheads 3 Fund Portfolio has several benefits, there are also some risks involved, including:

  • Market risk : The stock and bond markets are subject to fluctuations, so investing in a Bogleheads 3 Fund Portfolio does not guarantee a profit or protect against loss.
  • Inflation risk : The value of the portfolio can be eroded over time by inflation, especially if the portfolio is not regularly rebalanced.
  • Currency risk : The international stock market fund exposes investors to currency risk, which is the risk that changes in currency exchange rates will negatively impact the value of the portfolio.
  • Interest rate risk : The bond market is subject to interest rate risk, which is the risk that changes in interest rates will negatively impact the value of the bond portion of the portfolio.
  • Political risk : The international stock market fund exposes investors to political risk, which is the risk that changes in government policies or political events will negatively impact the value of the portfolio.

What Assets Does the Bogleheads 3 Fund Portfolio Include?

The Bogleheads 3 Fund Portfolio typically includes three types of low-cost index funds:

  • Total Stock Market Index Fund (for example, the ETF with the ticker code VTI): This fund provides exposure to the entire U.S. stock market and includes all types of companies, regardless of size or sector.
  • Total International Stock Market Index Fund (for example, the ETF with the ticker code VEU): This fund provides exposure to the global stock market and includes companies from developed and emerging markets.
  • Total Bond Market Index Fund (for example, the ETF with the ticker code BND): This fund provides exposure to the U.S. bond market and includes a variety of bonds with different maturities and credit qualities.

The goal of the Bogleheads 3 Fund Portfolio is to provide broad market exposure and diversification while minimizing costs and reducing the risk of investing in individual stocks. By investing in low-cost index funds, investors can potentially achieve long-term growth and reduce the impact of expenses on their returns.

How to Select the Right Funds for the Bogleheads 3 Fund Portfolio

To select the right funds for a Bogleheads 3 Fund Portfolio, consider the following steps:

  • Look for low-cost index funds : Choose funds with low expense ratios to minimize the impact of fees on your returns.
  • Choose a Total Stock Market Index Fund : Select a fund that tracks the entire U.S. stock market and includes a broad range of companies.
  • Choose a Total International Stock Market Index Fund : Select a fund that tracks the global stock market and includes companies from both developed and emerging markets.
  • Choose a Total Bond Market Index Fund : Select a fund that tracks the U.S. bond market and includes a variety of bonds with different maturities and credit qualities.
  • Consider the fund’s size and liquidity : Select funds that are large enough to be easily traded, and have a high level of liquidity to ensure that you can buy and sell shares without affecting the price.
  • Consider the fund’s tax efficiency : Select funds that are tax-efficient to minimize the impact of taxes on your returns.

All this considered, we believe VTI, VEU, and BND might be suitable.

Boglehead 3 allocations

John Bogle didn’t give specific recommendations on allocating the three different assets. In this article, we allocate 50% to US stocks, 30 to international stocks, and 20% to bonds.

What is the Bogleheads 4 Fund Portfolio?

The Bogleheads 4 Fund Portfolio is an investment strategy that includes four low-cost index funds to provide broad market exposure and diversification. The portfolio includes:

  • Total International Bond Market Index Fund ( for example, the ETF with the ticker code VXUS or IXUS): This fund provides exposure to the global bond market and includes bonds from both developed and emerging markets.

The goal of the Bogleheads 4 Fund Portfolio is to provide even greater diversification and include a mix of U.S. and international bonds. By investing in low-cost index funds, investors can potentially achieve long-term growth and reduce the impact of expenses on their returns.

How to Invest in a Bogleheads 4 Fund Portfolio

To invest in a Bogleheads 4 Fund Portfolio, follow these steps:

  • Determine your investment goals : Consider your risk tolerance, investment time horizon, and financial goals.
  • Choose low-cost index funds : Select funds with low expense ratios to minimize the impact of fees on your returns.
  • Allocate your investments : Decide how much of your portfolio to allocate to each of the four funds based on your investment goals and risk tolerance.
  • Make regular contributions : Consider making regular contributions to the portfolio to take advantage of dollar-cost averaging.
  • Monitor and rebalance : Regularly review and rebalance the portfolio to ensure it remains aligned with your investment goals and risk tolerance.

We believe VTI, VEU, BND, and VXIS/IXUS might be suitable.

What are the Benefits of a Bogleheads 4 Fund Portfolio?

The Bogleheads 4 Fund Portfolio offers several benefits, including:

  • Global diversification : The portfolio includes exposure to both U.S. and international stocks and bonds, reducing the impact of any single market or sector on your returns.
  • Low-cost investing : By investing in low-cost index funds, you can minimize the impact of fees and expenses on your returns.
  • Ease of management : The portfolio is relatively simple to manage and does not require frequent monitoring or rebalancing.
  • Potential for long-term growth : By investing in a diversified portfolio of low-cost index funds, you can potentially achieve long-term growth.

What Assets Does the Bogleheads 4 Fund Portfolio Include?

The Bogleheads 4 Fund Portfolio typically includes the following assets:

  • Total U.S. Stock Market Index Fund (VTI): This fund tracks the performance of the U.S. stock market as a whole, offering exposure to large, mid, and small-cap stocks.
  • Total International Stock Market Index Fund (VEU): This fund tracks the performance of international stocks, offering exposure to international companies and economies.
  • Total U.S. Bond Market Index Fund (BND): This fund tracks the performance of the U.S. bond market, offering exposure to a variety of U.S. bonds.
  • Total International Bond Market Index Fund (VXUS/IXUS): This fund tracks the performance of international bonds, offering exposure to bonds issued by international governments and corporations.

This portfolio typically seeks to provide exposure to a variety of asset classes and markets, allowing for diversification and the potential for long-term growth.

How to Select the Right Funds for the Bogleheads 4 Fund Portfolio

When selecting funds for the Bogleheads 4 Fund Portfolio, consider the following:

  • Type of fund : Choose the total stock market, bond market, international stock market, and international bond market funds.
  • Expense Ratio : Look for low-cost index funds with an expense ratio under 0.10%.
  • Fund Provider : Consider reputable and established fund providers with a strong track record.
  • Fund Objective : Make sure the funds align with your investment goals and risk tolerance.
  • Fund Performance : Review the historical performance of the funds, but keep in mind that past performance is not a guarantee of future results.

Boglehead 4 allocations

John Bogle didn’t give specific recommendations on allocating the four different assets. This article allocates 50% to US stocks, 30 to international stocks, 10% to bonds, and 10% to international bonds.

What is the Difference Between the Bogleheads 3 and 4 Fund Portfolios?

While both portfolios seek to provide diversified exposure to a variety of asset classes and markets and are based on the principle of passive investing and low-cost index funds, they differ in terms of the number of funds they include and the specific assets they hold.

The Bogleheads 3 Fund Portfolio consists of three funds: a Total U.S. Stock Market Index Fund, a Total International Stock Market Index Fund, and a Total U.S. Bond Market Index Fund.

On the other hand, the Bogleheads 4 Fund Portfolio consists of four funds: a Total U.S. Stock Market Index Fund, a Total International Stock Market Index Fund, a Total U.S. Bond Market Index Fund, and a Total International Bond Market Index Fund.

The Bogleheads 4 Fund Portfolio includes an additional fund that provides exposure to the international bond market, whereas the Bogleheads 3 Fund Portfolio does not.

Which Bogleheads Portfolio is Best for a Global Investor?

The Bogleheads 4 Fund Portfolio may be a better option for a global investor as it includes exposure to the international stock and bond markets. This provides a more diversified portfolio compared to the Bogleheads 3 Fund Portfolio, which only includes exposure to the international stock market.

However, both portfolios have their advantages and disadvantages, and the best option for a global investor will depend on their individual investment goals, risk tolerance, and other factors. It is important to consider the asset allocation, expense ratio, and historical performance of each fund in the portfolio before making a decision.

How to Create a Balanced Investment Mix with the Bogleheads Portfolios

To create a balanced investment mix with the Bogleheads portfolios, it is important to consider your individual investment goals, time horizon, and risk tolerance.

For a balanced mix, allocating a portion of your portfolio to each of the funds in the Bogleheads 3 or 4 Fund Portfolio is recommended, depending on which one you choose. A common allocation strategy is to invest in a ratio of approximately 60% stocks and 40% bonds.

How Market Conditions Affect the Boglehead Portfolios

Market conditions can have a significant impact on the performance of the Bogleheads portfolios, as they are invested in a mix of stocks and bonds, both of which can be affected by changes in market conditions. For example, in times of economic uncertainty or market volatility, stock prices may fall, which can negatively impact the stock components of the portfolios. Conversely, when the economy is growing and the market is stable, stock prices may increase, providing positive returns for the portfolios.

Bonds can also be affected by changes in market conditions, with changes in interest rates significantly impacting bond prices. In general, rising interest rates can lead to lower bond prices and lower returns, while falling interest rates can boost bond prices and returns.

It is important to keep in mind that the Boglehead4s portfolios are designed for long-term investing and market fluctuations are a normal part of the investment process. By staying disciplined and avoiding reactive decisions, investors can weather short-term market conditions and benefit from the long-term returns of a well-diversified portfolio.

Bogleheads 3 And 4 Fund Portfolio Backtest – Do They Work?

Let’s backtest both portfolios using the ticker codes mentioned in the article. We start with the Bogleheads 3 portfolio:

Bogleheads 3 portfolio backtest and performance

Trading rules.

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The annual return is 7.6%, dividends are included and reinvested, and max drawdown is 28%.

Bogleheads 4 portfolio backtest and performance

We allocated 50% to VTI, 30% to VEU, 10% to BND, and 10% to IXUS. We got the following equity curve:

The annual return was 7.8%and max drawdown was 31%.

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These strategies must not be misunderstood for the premium strategies that we charge a fee for:

How do I invest in a Bogleheads 3 Fund Portfolio?

The Bogleheads 3 Fund Portfolio is a low-cost investment strategy popularized by Jack Bogle. It consists of three index funds: U.S. Total Stock Market, International Stock Market, and U.S. Total Bond Market. Steps include opening a brokerage account, choosing specific index funds (e.g., VTI, VEU, BND), determining asset allocation, starting investments, and monitoring for periodic rebalancing.

What is the Bogleheads 4 Fund Portfolio and its benefits?

The Bogleheads 4 Fund Portfolio adds international bonds to the 3 Fund Portfolio, offering global diversification, low-cost investing, ease of management, and potential for long-term growth. The Bogleheads 4 Fund Portfolio adds international bonds to the 3 Fund Portfolio, offering global diversification, low-cost investing, ease of management, and potential for long-term growth.

How do market conditions affect Bogleheads portfolios?

Market conditions can impact performance; for instance, economic uncertainty or volatility may affect stock prices, and changes in interest rates can impact bonds. The backtest showed an annual return of 7.6%, dividends included and reinvested, with a maximum drawdown of 28%.

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Lazy Portfolio ETF

Lazy Portfolio ETF

Lazy permanent portfolios built with ETFs

Bogleheads Three Funds Portfolio: ETF allocation and returns

The Bogleheads Three Funds Portfolio is a Very High Risk portfolio and can be implemented with 3 ETFs .

It's exposed for 80% on the Stock Market.

In the last 30 Years , the Bogleheads Three Funds Portfolio obtained a 7.78% compound annual return , with a 12.41% standard deviation.

Asset Allocation and ETFs

The Bogleheads Three Funds Portfolio has the following asset allocation:

The Bogleheads Three Funds Portfolio can be implemented with the following ETFs:

Most of Lazy Portfolios are made of common components (asset classes), very simple and well defined. For a more complete view, find out the most common ETFs you can use to build your portfolio.

Portfolio and ETF Returns as of Dec 31, 2023

The Bogleheads Three Funds Portfolio guaranteed the following returns.

  • no fees or capital gain taxes.
  • a rebalancing of the components at every January 1st. How do returns change with different rebalancing strategies?
  • the reinvestment of dividends.
  • the actual US Inflation rates.

In 2023, the Bogleheads Three Funds Portfolio granted a 2.62% dividend yield . If you are interested in getting periodic income, please refer to the Bogleheads Three Funds Portfolio: Dividend Yield page.

Capital Growth as of Dec 31, 2023

Principios para superar crisis de gran endeudamiento

Portfolio Metrics as of Dec 31, 2023

Metrics of Bogleheads Three Funds Portfolio , updated as of 31 December 2023.

  • Annualized Portfolio Return : it's the annualized geometric mean return of the portfolio.
  • Deepest/Longest Drawdown : a drawdown refers to the decline in value from a relative peak value to a relative trough. The deepest (or maximum) drawdown is the maximum observed loss from a peak to a trough of a portfolio before a new peak is attained. The longest drawdown is the period observed from a peak to the subsequent peak with the greatest duration.
  • Longest negative period : it's the maximum period for which an overall negative return has been observed.
  • Standard Deviation : it's a measure of the dispersion of returns around the mean.
  • Sharpe Ratio : it's a measure of risk-adjusted performance of the portfolio. It's calculated by dividing the excess return of the portfolio over the risk-free rate by the portfolio standard deviation. The risk-free rate here considered is the 1-3 Mth T-Bill return.
  • Sortino Ratio : another measure of risk-adjusted performance of the portfolio. It's a modification of the Sharpe Ratio (same formula but the denominator is the portfolio downside standard deviation).
  • Ulcer Index : it's a measure of downside risk that quantifies the depth and duration of drawdowns in an investment portfolio.
  • Best/Worst 10Y returns : the best and the worst 10-year return over a time frame.
  • Rolling Returns : N-year returns over a time frame, calculated over all the available data source (best, worst, % of positive returns). Each rolling period, longer than the longest negative period , yielded a non-negative minimum return.
  • Safe Withdrawal Rate (SWR) : it's the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, without the portfolio running out of money in any case ( money amount withdrawal ). For instance: Your initial invested capital is 100.000$; withdrawal rate (annualized) is 4%. This means that, in the first month, you will withdraw 100.000 * 4% * 1/12 = 333.33$. The second month, you’ll withdraw 333.33$ plus the inflation monthly rate. You’ll continue adjusting your withdraw monthly for inflation.
  • Perpetual Withdrawal Rate (PWR) : it's the percentage of the initial portfolio balance that can be withdrawn at the beginning of each month with inflation adjustment, preserving the original invested capital, adjusted for inflation too.

Portfolio Components Correlation

Correlation measures to what degree the returns of the two assets move in relation to each other.

If you want to learn more about historical correlations, you can find out here how the main asset class are correlated to each other .

A drawdown refers to the decline in value from a relative peak value to a relative trough. A maximum drawdown is the maximum observed loss from a peak to a trough of a portfolio before a new peak is attained.

Rolling Returns

( more details )

A rolling return is a measure of investment performance that calculates the return of an investment over a set period of time, with the starting date rolling forward . This approach can provide a more accurate representation of the investment's historical performance and helps investors to evaluate the investment's consistency over time.

If you need a deeper detail about rolling returns, please refer to the Bogleheads Three Funds Portfolio: Rolling Returns page.

Seasonality

In which months is it better to invest in Bogleheads Three Funds Portfolio ?

Monthly Returns

This section provides a visual/tabular representation of the performance variability in the Bogleheads Three Funds Portfolio over time. It illustrates the distribution of monthly returns, showcasing the range and frequency of positive and negative returns.

  • VTI - Vanguard Total Stock Market (VTI) , up to December 2001
  • VEU - Vanguard FTSE All-World ex-US (VEU) , up to December 2007
  • BND - Vanguard Total Bond Market (BND) , up to December 2007

Portfolio efficiency

The following portfolios granted a higher return over 30 Years and a less severe drawdown at the same time.

Here's a list containing the Best Classic Portfolios , with the highest returns over 30 Years and Very High Risk categorization.

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Optimized Portfolio

Investing and Personal Finance

Bogleheads 4 Fund Portfolio Review and Vanguard ETFs To Use

Last Updated: July 17, 2023 13 Comments – 5 min. read

The Bogleheads 4 Fund Portfolio is globally diversified across stocks and bonds. Here we’ll investigate its components, historical performance, and the best ETF’s to use in its implementation.

Interested in more Lazy Portfolios? See the full list here.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here .

Prefer video? Watch it here:

boglehead funds

What is the Bogleheads 4 Fund Portfolio?

The Bogleheads 4 Fund Portfolio is simply the Bogleheads 3 Fund Portfolio with the addition of international bonds. The theory and mechanics underlying the composition of the 4 Fund Portfolio is the same as that of the 3 Fund Portfolio. For the sake of brevity in this post, I won't be repeating it here. I would strongly encourage you to go read the post on the 3 Fund Portfolio first and then come back here where I'm simply discussing the addition of the international bonds component.

The Bogleheads 4 Fund Portfolio, as the name suggests, is comprised of 4 funds capturing U.S. stocks, U.S. bonds, international stocks, and international bonds. This gets you fully diversified globally across all styles and cap sizes for stocks and bonds. Let's look at the specific assets.

At global market weights, U.S. stocks only comprise about 50% of the global market. International stocks don't move in perfect lockstep with U.S. stocks, offering a diversification benefit. If U.S. stocks are declining, international stocks may be doing well, and vice versa.

No single country consistently outperforms all the others in the world. If one did, that outperformance would also lead to relative overvaluation and a subsequent reversal. Meb Faber found that if you look at the past 70 years, the U.S. stock market has outperformed foreign stocks by 1% per year, but all of that outperformance has come after 2009.

Excluding stocks outside the U.S. means you're missing out on leading companies that happen to be based elsewhere. Similarly, there have been periods where a global portfolio outperformed a U.S. portfolio. During the period 1970 to 2008, an equity portfolio of 80% U.S. stocks and 20% international stocks had higher general  and   risk-adjusted returns than a 100% U.S. stock portfolio. Specifically, international stocks outperformed the U.S. in the years 1986-1988, 1993, 1999, 2002-2007, 2012, and 2017.

Emerging Markets and international small cap stocks have crushed the U.S. market historically, for example, as they're considered riskier, and investors are compensated for that greater risk. And this is just talking about performance. The volatility and risk reduction benefits are another conversation entirely, which is of huge significance for a retiree.

Dalio and Bridgewater maintain that global diversification in equities is going to become increasingly important given the geopolitical climate, trade and capital dynamics, and differences in monetary policy. They suggest that it is now even less prudent to assume a preconceived bet that any single country will be the clear winner in terms of stock market returns.

In short, geographic diversification in equities has huge potential upside and little downside for investors.

I went into the merits of international diversification in even more detail in a separate post here if you're interested.

Just as in the 3 Fund Portfolio, here I've set both international stocks and international bonds at 1/3 the allocations of their domestic counterparts.

The inclusion of international bonds in diversified portfolios and target date funds is a fairly recent occurrence. Until recently, costs of international bond fund products were prohibitive for retail investors, and international assets of all kinds were viewed with skepticism until about the 1990's. Vanguard didn't begin including international bonds in their target date funds until 2013.

The evidence seems to show that international bonds may offer a small diversification benefit in terms of credit risk on the fixed income side due to their low correlation with both U.S. stocks and U.S. bonds, but there’s no compelling reason to think it's any significant benefit. This potential diversification benefit is even less convincing for a portfolio that is not bond-heavy.

Larry Swedroe suggests , based on a 2014 Vanguard paper, that investing in foreign bonds may be prudent for reducing portfolio volatility if and only if the investor can do so with low fees and with currency hedging to eliminate currency risk. Without currency hedging, it's basically FOREX trading. Luckily, Vanguard's Total International Bond ETF (BNDX) satisfies those requirements.

Vanguard published another paper in 2018, proposing that “various local market risk factors (such as interest rates, inflation, and yield curves) have resulted in relatively low correlations of government bond yields across markets over the past 50 years, suggesting a diversification benefit to increasing the number of global markets in a fixed income allocation.” While the research is comprehensive, the tiny diversification benefit they illustrate is negligible in my opinion. Specifically, they showed that for a 60/40 portfolio during the period 1985-2013, diversifying internationally with fixed income resulted in a reduction of volatility as measured by standard deviation from 9.5 to 9.4, a reduction of 1%.

In short, there's no good reason to consciously avoid international bonds, but there's also no good reason to embrace them either; it's unlikely to help your portfolio, and it's unlikely to hurt it.

Allocations

Assuming a retirement age of 60, my general rule of thumb is to use [age-20] for bond allocation , obviously titrating up or down based on risk tolerance. Vanguard has a useful tool here to help you choose. You can also view how different allocations have performed historically .

Given that, for the sake of simplicity in this post, let's assume a starting age of 20 and a retirement age of 60, yielding an average investor age of 40. Based on that, a one-size-fits-most 80/20 allocation for the Bogleheads 4 Fund Portfolio is:

  • 60% U.S. Stocks
  • 20% International Stocks
  • 15% U.S. Bonds
  • 5% International Bonds

bogleheads 4 fund portfolio

Bogleheads 4 Fund Portfolio Historical Performance

My data for the total international bond market only goes back to 1999, so the backtest below is for the period 1999 through 2021, comparing an 80/20 Bogleheads 4 Fund Portfolio to the S&P 500 index .

bogleheads 4 fund portfolio performance

Given the short time period, CAGR's are pretty close, with the 4 Fund Portfolio having a higher risk-adjusted return from lower volatility and smaller drawdowns:

bogleheads 4 fund portfolio drawdowns

Bogleheads 4 Fund Portfolio ETF Pie for M1 Finance

M1 Finance  is a great choice of broker to implement the Bogleheads 4 Fund Portfolio because it makes regular rebalancing seamless and easy, has zero transaction fees, allows fractional shares, and incorporates dynamic rebalancing for new deposits.

Using entirely low-cost Vanguard funds, we can construct an 80/20 allocation of the  Bogleheads 4 Fund Portfolio pie  like this:

You can add the this pie to your portfolio on M1 Finance by clicking  this link  and then clicking “Save to my account.”

Are you nearing or in retirement? Use my link here to get a free holistic financial plan from fiduciary advisors at Retirable to manage your savings, spend smarter, and navigate key decisions.

Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com .

Disclosure:  I am long VTI and VXUS.

Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here .

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boglehead funds

About John Williamson, APMA®

Analytical data nerd, investing enthusiast, fintech consultant, Boglehead, and Oxford comma advocate. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit .

Reader Interactions

boglehead funds

May 6, 2022 at 5:42 pm

Hello, John.

I know this is a late post, but I only now found this article. I’m curious as to why you use allocations that are so different than those for the 80/20 on the the Bogleheads site. https://www.bogleheads.org/wiki/Vanguard_four_fund_portfolio

You mention the need the general theory of the need for more international exposure, but this version of the 4 fund portfolio has less. I am just wanting to understand your thinking on this. Maybe you just went with what was already in the M1 Pie?

Thanks, Daniel

boglehead funds

May 6, 2022 at 9:26 pm

I just put an example of what I see most people using because many US investors prefer home country bias, for better or for worse. Investors are free to choose their own US/int’l allocation.

boglehead funds

March 21, 2022 at 1:33 am

Following some of your thoughts regarding the superiority of government bonds to corporate you’ve written about elsewhere, and a preference for long term at that – what would you think of replacing BND with GOVT, or EDV, or SPIP, or LTPZ? And is there one you’d personally prefer? I think there’s an argument for the beauty of simplicity with GOVT, but SPIP or LTPZ would be better as inflation hedges.

March 21, 2022 at 10:06 am

I like GOVT over BND. EDV would be for a time horizon of 25+ years. TIPS are likely only needed at or near retirement.

boglehead funds

January 15, 2022 at 10:24 pm

Does FBIIX have currency hedging like BNDX?

January 16, 2022 at 1:24 pm

November 24, 2022 at 9:52 pm

Thanks! I’ve been following this portfolio with Fidelity funds for couple of years now, but want to do some tilts without adopting a whole new portfolio. For example, keeping my FSKAX (60%) and FTIHX (40%) but moving to adding some small or mid cap tilts and what that could look like. I’ve often been annoyed with the the top heavy exposure in total market funds, but don’t want to move to a 8+ fund portfolio either. Would love to see a post on this in the future.

boglehead funds

October 7, 2021 at 2:54 pm

How often should we adjust bonds to match our age -20? Every year, every 5 years, every 10 years?

October 7, 2021 at 3:22 pm

Great question, Keith. I’d say in between 1 and 5 years. No more than 5.

boglehead funds

July 17, 2021 at 12:36 pm

I like the idea underlying this portfolio, and I’m considering deploying it in a taxable brokerage account. However, I wonder if replacing the US Bonds portion with NTSX would make a measure of sense to increase returns. Since it is effectively a 90/60 in a single fund, it seems to me that I could match the contribution of BND with NTSX at 25%, then decrease VTI to make it fit. Thoughts?

July 17, 2021 at 8:55 pm

I don’t see how replacing bonds with NTSX makes any sense, as then your allocation to stocks would be higher, e.g. 80/20 VTI/BND turns into 98/12 stocks/bonds if you replace BND with NTSX. Maybe decide on a target asset allocation and then choose funds to fit that. Or use the diversification use case for NTSX that I outlined here .

boglehead funds

May 17, 2021 at 5:39 pm

Can I change the international bond fund For emerging markets bond funds?

May 17, 2021 at 7:53 pm

Sure, just know those are two very different investments.

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Bogleheads Stay the Course

Bears and market volatility don’t scare these die-hard Vanguard investors.

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Attendees watch a presentation at a conference of

On the morning of Thursday, October 13, as the Dow Jones industrial average plunged more than 500 points, a gathering of 370 investors and financial advisers—who were, as a group, losing tens of millions of dollars that very moment—calmly noshed on oatmeal and Danish. “Don’t just do something, stand there!” cheered the meeting’s speakers, quoting the inspiration of the conference, the late Jack Bogle, founder of Vanguard and early proselytizer of the index mutual fund. 

During a three-day conference at a Chicago-area hotel, the self-described “Bogleheads” did indeed just stand there. And sit there. Cell phones were muted. Nobody called their broker. Instead, on what turned out to be one of the most volatile days in the stock market’s history, they recalled Bogle-isms about ignoring short-term blips. Through presentations, meals and afternoon treats of ice cream sandwiches, they reassured each other that low-cost, long-term passive investing would eventually pay off better than chasing hot tips or panic selling. 

Their adages about patience, discipline, simplicity and bargain hunting may well strike a chord with any investor worried about today’s volatile investing environment.  

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Stay the course. Over the long term, the U.S. stock market has more than recovered from every bearish slump, notes Jim Dahle, a physician-turned-investing guru and author of The White Coat Investor. “I expect to live through 17 bear markets as an investor,” Dahle told the crowd. In October 1987, “the stock market had the biggest one-day drop ever, but it still finished positive for the year,” he noted. He summed up his advice with the title of one of Bogle’s books: “Stay the course.”

Bogle, who died in January 2019, founded Malvern, Pa.–based Vanguard in 1974. Two years later, he launched the first publicly available index fund, which followed the S&P 500 index. Wall Street professionals and money managers scoffed at what they called “Bogle’s folly.” Bogle stayed the course, and Vanguard’s low-cost index funds attracted a growing fan base because they generally out-earned expensive funds managed by professionals who actively tried to beat the market.

In 1998, a small group of cost-conscious investors who called themselves “Vanguard Diehards” formed a group chat on a Morningstar electronic forum. Two years later, 22 Diehards met Bogle for dinner at a member’s Florida house. The gatherings turned into annual events and grew in popularity. They became multiday Bogle-cons, featuring action toys (such as a Bogle bobblehead) and presentations by Morningstar analysts, popular investing authors such as William Bernstein (who wrote The Four Pillars of Investing and several other books) and Bogle-minded financial advisers.

By 2007, the group had evolved into Bogleheads. Discussion group leaders, including Taylor Larimore, a retired IRS officer and financial manager whom Bogle nicknamed “the King of the Bogleheads,” and Mel Lindauer, a retired graphics company CEO (dubbed “the Prince”), began publishing advice books including The Bogleheads’ Guide to Investing. One of the central tenets: Investors should just stick with a basic, low-cost, three-fund portfolio of Vanguard’s Total Stock Market Index ( VTSAX ), Total International Stock Index (VTIAX ) and Total Bond Market Index ( VBTLX ).

At the most recent assembly, longtime Boglehead Allan Roth, a fee-only financial adviser based in Colorado, told attendees that the three-fund portfolio is his core recommendation because it is boring. Roth, whose Twitter handle is @Dull_Investing, says one reason a largely hands-off port-folio works is that investors who use it don’t go astray by chasing returns. Morningstar research has shown that individual investors tend to pour money into funds right after they’ve notched record gains, he says, and that means investors often end up buying fund shares at high prices-, which leads those investors’ personal returns to underperform the funds they invest in by an average of 1.7 percentage points a year. By putting your portfolio on autopilot, you “minimize expenses and emotions and maximize diversification and discipline, which means you lose less money than most other people,” Roth says. 

But many Bogleheads are also open to some market timing—as long as investors are buying low. “International stocks are a screaming deal right now,” Dahle told the group. The average holding of Vanguard Total International Stock was selling at a price-earnings ratio of a little more than 10 in early November. By contrast, even after the 2022 plunge in stock prices, Vanguard Total U.S. Stock Market holdings were selling at an average P/E of about 16. 

The drop in Treasury bond prices in 2022 has created an opportunity for safety-conscious investors to lock in higher yields and decent long-term returns, Roth says. Long-term Treasury inflation-protected securities recently yielded more than 1.5% above the inflation rate. Putting a portion of your portfolio in TIPS is a great way to diversify and protect your retirement savings, he says. That’s especially apt now, when he worries that U.S. investors have become used to what some have called “teddy bear” downturns, in which stock prices tend to rebound quickly. But “grizzly bears” could be lurking—perhaps even now, says Roth. “I’m a pessimist.” 

Cheap, boring and sexy. The focus on simplicity and safety is what attracted Maggie Oldham, a Nashville-based nurse, to her first Boglehead convention this fall. Oldham, who had never read any of Bogle’s books, says she spent the first 40 years of her life in a “financial coma,” paying too much for everything from her mortgage to investments. Whenever she’d talk to friends or relatives about investing, they’d suggest “you should see my guy”—typically a commission-based broker who often pushed expensive or complicated strategies. Searching online led her to several “financial independence” proponents. Some of them recommended the Boglehead books and website .  

After reading and interacting with the forum (and putting her taxable savings in the three-fund portfolio),  Oldham had finally found her tribe. At home, her focus on simple saving and investing makes her feel like a bit of a loner. But at the Boglehead conference, she says, “I fit right in—and I got validation that I am on the right path for me.” By the end of the conference, Oldham was strategizing ways to talk up Boglehead values in Nashville to help create a community and “make it sexy to be cheap and boring,” she says. 

Rick Ferri, an hourly-fee financial adviser who is the president of the group that held the conference, the John C. Bogle Center for Financial Literacy, warned the attendees that not all investors they meet will be kindred spirits—at least not right away. But the markets that week seemed intent on converting at least a few. After a Thursday morning federal data release confirmed continuing high inflation, the stock market opened down more than 2%. For some reason, that set off a buying spree that pushed the overall stock market up about 5% by the close of trading. The next day, most of that gain disappeared. By the time the Bogleheads’ planes landed in their hometowns on Friday, much of their portfolio holdings were also back home—at almost exactly the value they’d been at the start of the week.

Kim Clark is a veteran financial journalist who has worked at Fortune, U.S News & World Report and Money magazines. She was part of a team that won a Gerald Loeb award for coverage of elder finances, and she won the Education Writers Association's top magazine investigative prize for exposing insurance agents who used false claims about college financial aid to sell policies. As a Kiplinger Fellow at Ohio State University, she studied delivery of digital news and information. Most recently, she worked as a deputy director of the Education Writers Association, leading the training of higher education journalists around the country. She is also a prize-winning gardener, and in her spare time, picks up litter.

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Want to Retire Like a Boglehead? 5 Low-Cost Vanguard Funds

Posted: January 4, 2024 | Last updated: January 18, 2024

<p>Vanguard is among the fund companies you can thank for a much lower-cost path to retirement saving than we used to have. That's because, under visionary founder Jack Bogle, Vanguard created the concept of the low-cost index fund.</p><p>The company's low-cost legacy continues today via an ever-expanding suite of Vanguard mutual funds, and those savings can be had not just in indexed products, but even its actively managed products, too.</p><p><strong>Vanguard's top retirement offerings are almost always competitive on price, and these funds are all popular choices in American 401(k) and IRA plans. Today, I'll introduce you to five of these retirement-focused mutual funds (and where applicable, their ETF counterparts).</strong></p><p><i>Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.</i></p>

Retirement Products From the Vanguard Funds Family

Vanguard is among the fund companies you can thank for a much lower-cost path to retirement saving than we used to have. That's because, under visionary founder Jack Bogle, Vanguard created the concept of the low-cost index fund.

The company's low-cost legacy continues today via an ever-expanding suite of Vanguard mutual funds, and those savings can be had not just in indexed products, but even its actively managed products, too.

Vanguard's top retirement offerings are almost always competitive on price, and these funds are all popular choices in American 401(k) and IRA plans. Today, I'll introduce you to five of these retirement-focused mutual funds (and where applicable, their ETF counterparts).

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

<p>When investing your <strong>retirement savings</strong>, you need to consider a few critical factors.</p><p>To start, a robust retirement portfolio should provide diversification across various asset classes, such as stock funds, bond funds, and possibly <b>real estate</b> or commodity mutual funds. Diversifying your retirement portfolio across these asset classes helps spread risk and smooth your returns.</p><p>Costs matter too, which is why Vanguard mutual funds are often mainstays in retirement portfolios. Every dollar spent on fees and expenses is a dollar no longer available to grow and compound over time, so keeping expenses cut to the bone is vital. Good news there: The best Vanguard retirement funds will generally have some of the lowest fees and expenses in the business.</p><p>And finally, you ideally want your retirement portfolio to produce regular <b>dividend income</b>. Stocks can regularly experience nasty corrections and bear markets, but a good income fund can provide for your living expenses without forcing you to sell at an inopportune time.</p>

What Should You Want in a Retirement Fund?

When investing your retirement savings , you need to consider a few critical factors.

To start, a robust retirement portfolio should provide diversification across various asset classes, such as stock funds, bond funds, and possibly real estate or commodity mutual funds. Diversifying your retirement portfolio across these asset classes helps spread risk and smooth your returns.

Costs matter too, which is why Vanguard mutual funds are often mainstays in retirement portfolios. Every dollar spent on fees and expenses is a dollar no longer available to grow and compound over time, so keeping expenses cut to the bone is vital. Good news there: The best Vanguard retirement funds will generally have some of the lowest fees and expenses in the business.

And finally, you ideally want your retirement portfolio to produce regular dividend income . Stocks can regularly experience nasty corrections and bear markets, but a good income fund can provide for your living expenses without forcing you to sell at an inopportune time.

<p>Vanguard actually has two sets of retirement funds:</p><p><b>-- Vanguard Target Retirement Funds</b>, a set of target-date funds along with an income fund for investors who are already in retirement</p><p><b>-- Vanguard LifeStrategy Funds</b>, a set of balanced funds with fixed strategies designed for investors more actively managing their own retirement portfolios</p><p><a href="https://wealthup.com/best-investment-apps-platforms/"><b>19 Best Investment Apps and Platforms [Free + Paid]</b></a></p>

Why Vanguard Mutual Funds?

Vanguard Group is a leader in index mutual funds. Vanguard founder Jack Bogle launched the first Vanguard index fund for U.S. retail investors—the Vanguard First Index Investment Trust, which is now the Vanguard 500 Index Fund Admiral Shares (VFIAX)—in 1976, and in the four-and-a-half decades that have followed, Vanguard Funds have grown to become the dominant force in index investing.

Today, this former upstart mutual fund company has more than $8 trillion in assets under management with an average expense ratio of just 0.09%, or a mere $9 for every $10,000 invested. There are currently 419 Vanguard funds, including both its mutual funds and Vanguard ETFs.

And Vanguard index funds cover every conceivable pocket of the investable universe, including individual sector funds and emerging markets.

Vanguard grew into the powerhouse mutual fund company it is today by taking care of its clients and genuinely looking after their interests. Vanguard funds really started and continue to accelerate the trend of fee compression. But it's not only the best Vanguard retirement funds that benefit. We all collectively pay less in fees and expenses and enjoy better returns because of the index revolution started and led by Vanguard's founder Jack Bogle.

<p>With all that out of the way, let's dig into some of the best Vanguard retirement funds to consider diving into this year. The choices we highlight below encompass a wide variety of asset classes available through Vanguard's fund lineup, so you'll need to consider the appropriate allocation (if any) make sense for your specific circumstances.</p><p><strong><a href="https://wealthup.com/best-etfs-to-buy/">The 24 Best ETFs to Buy for a Prosperous 2024</a></strong></p>

Vanguard's Top Retirement-Focused Funds for 2024

With all that out of the way, let's dig into some of the best Vanguard retirement funds to consider diving into this year. The choices we highlight below encompass a wide variety of asset classes available through Vanguard's fund lineup, so you'll need to consider the appropriate allocation (if any) make sense for your specific circumstances.

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<p><b>-- Style: </b>U.S. large-cap stock</p><p><b>-- Assets under management: </b>$437.9 billion</p><p><b>-- Expense ratio: </b>0.04%, or 40¢ per year for every $10,000 invested</p><p><b>-- Dividend yield: </b>1.5%</p><p><b>-- Minimum initial investment:</b> $3,000</p><p>For a solid, long-term growth investment, it's hard to beat a low-cost S&P 500 index fund.</p><p>In fact, virtually no one does, or at least not consistently. The vast majority of fund managers who run large-cap funds (funds that invest in larger companies) struggle to consistently beat the S&P 500 Index, particularly after fees. In the first half of 2023, 60% of active managers underperformed the S&P 500, according S&P Dow Jones Indices. A majority of active  managers have failed to beat the S&P 500 in 20 out of the past 23 years.</p><p>So if you can't beat it, join it.</p><p>The <b>Vanguard 500 Index Fund Admiral Shares (VFIAX)</b> boasts well more than $400 billion in assets under management, and that's just in the VFIAX share class. Across all of the mutual fund's share classes, this fund manages more than $930 billion! That scale is why <a href="https://wealthup.com/vtsax-vs-vfiax/"><b>VFIAX</b></a> can offer a skinflint expense ratio of just 0.04%—that's not free, but it's awfully close.</p><p>The S&P 500 is a collection of the largest and most dominant American companies. To be selected for this stock market index, a company must have a market capitalization of at least $14.5 billion, its shares must be highly liquid (shares are frequently bought and sold), at least 50% of its outstanding shares must be available for public trading, it must have positive earnings in the most recent quarter, and the sum of its previous four quarters must be positive. Once a company is in the index, it doesn't necessarily get kicked out if it fails to meet all of the criteria at some point in the future, but the selection committee would take that under consideration.</p><p>Turnover (how much the fund tends to buy and sell holdings) tends to be low, as only a handful of stocks enter or leave the index in any given year. This makes VFIAX an extremely tax-efficient option for taxable investors. This may be Vanguard's oldest index strategy, but it remains one of the very best Vanguard retirement funds.</p><p>If the $3,000 minimum is a problem, the exact same strategy is available via the Vanguard S&P 500 ETF (VOO), which charges an even cheaper 0.03% in annual expenses. At time of writing, a single share can be purchased for around $433.</p><p><b><a href="https://wealthup.com/best-stock-investment-research-websites-software/">21 Best Investing Research & Stock Analysis Websites</a></b></p>

1. Vanguard 500 Index Fund Admiral Shares (VFIAX)

-- Style: U.S. large-cap stock

-- Assets under management: $437.9 billion

-- Expense ratio: 0.04%, or 40¢ per year for every $10,000 invested

-- Dividend yield: 1.5%

-- Minimum initial investment: $3,000

For a solid, long-term growth investment, it's hard to beat a low-cost S&P 500 index fund.

In fact, virtually no one does, or at least not consistently. The vast majority of fund managers who run large-cap funds (funds that invest in larger companies) struggle to consistently beat the S&P 500 Index, particularly after fees. In the first half of 2023, 60% of active managers underperformed the S&P 500, according S&P Dow Jones Indices. A majority of active managers have failed to beat the S&P 500 in 20 out of the past 23 years.

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So if you can't beat it, join it.

The Vanguard 500 Index Fund Admiral Shares (VFIAX) boasts well more than $400 billion in assets under management, and that's just in the VFIAX share class. Across all of the mutual fund's share classes, this fund manages more than $930 billion! That scale is why VFIAX can offer a skinflint expense ratio of just 0.04%—that's not free, but it's awfully close.

The S&P 500 is a collection of the largest and most dominant American companies. To be selected for this stock market index, a company must have a market capitalization of at least $14.5 billion, its shares must be highly liquid (shares are frequently bought and sold), at least 50% of its outstanding shares must be available for public trading, it must have positive earnings in the most recent quarter, and the sum of its previous four quarters must be positive. Once a company is in the index, it doesn't necessarily get kicked out if it fails to meet all of the criteria at some point in the future, but the selection committee would take that under consideration.

The 7 Best Vanguard ETFs for 2023 [Build a Low-Cost Portfolio]

Turnover (how much the fund tends to buy and sell holdings) tends to be low, as only a handful of stocks enter or leave the index in any given year. This makes VFIAX an extremely tax-efficient option for taxable investors. This may be Vanguard's oldest index strategy, but it remains one of the very best Vanguard retirement funds.

If the $3,000 minimum is a problem, the exact same strategy is available via the Vanguard S&P 500 ETF (VOO), which charges an even cheaper 0.03% in annual expenses. At time of writing, a single share can be purchased for around $433.

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<p><b>- Type:</b> Mutual fund</p><p><b>- Assets under management:</b> $92 billion</p><p><b>- Expense ratio:</b> 0.05%, or $5 per year for every $10,000 invested</p><p><b>- SEC yield:</b> 3.1%*</p><p>While most of the other index funds on this list are ETFs, this bond mutual fund from Vanguard is cheap, diversified, and just as effective as its exchange-traded competitors.</p><p>If you’re new to the subject: Bonds are a way for governments, companies, and other entities to raise money. You buy a bond from the U.S. government, and they agree to pay you back (with interest) by a certain date. That interest rate is delivered in a fixed “coupon payment,” usually made every six months.</p><p>Of course, it can be difficult to invest in individual bonds, and extremely difficult to research and hold a variety of them. But even newbie investors can get broad exposure via funds such as the <b>Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)</b>, which holds nearly 18,000 different bonds. Importantly, these bonds are what are considered “investment-grade,” meaning bond raters believe each holding meets a certain quality standard, and that it’s very likely investors will receive their full investment back. In fact, more than 70% of VBTLX’s holdings are graded AA and above from bond rating agencies, which is pretty close to bulletproof when it comes to credit ratings. Current lenders include the U.S. Treasury, giant corporations such as Johnson & Johnson (JNJ), and other similar entities with deep pockets and a high likelihood of repayment.</p><p>The good news? These bonds carry extremely little risk. The downside is, you might not get a huge reward for your investment. Bond funds rarely grow in price the way that stock funds do, so the real reward for holding VBTLX is the interest income it regularly pays. But, as interest rates have risen over the past year, so too has the yield on this index fund.</p><p>One important potential stumbling block: VBTLX has a minimum investment of $3,000. That might not be a high hurdle for some investors, but it can be for beginners. If so, you can easily tap into its exchange-traded sister fund, the Vanguard Total Bond Market ETF (BND), which you can buy for the price of just one share (currently around $72, though that can change).</p><p><i>* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.</i></p><p><a href="https://investor.vanguard.com/investment-products/mutual-funds/profile/vbtlx" rel="noopener"><b><i>Learn more about VBTLX at the Vanguard provider site.</i></b></a></p><p><b>Related: <a href="https://wealthup.com/investments-that-earn-a-great-return/">10 Investments that Earn a Great Return [10% or More]</a></b></p>

2. Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)

-- Style: U.S. intermediate core bond

-- Assets under management: $96.0 billion

-- Expense ratio: 0.05%, or 50¢ per year for every $1,000 invested

-- SEC yield: 4.5%*

No retirement asset allocation is complete without bond funds. As an asset class, bond funds play an important role in lowering volatility and providing regular income.

And within the world of Vanguard bond funds, the Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) stands out as one of the very best Vanguard retirement funds for its combination of competitive yield and rock-bottom fees and expenses. VBTLX is large, with $96.0 billion in the Admiral share class and more than $300 billion in quality bond assets spread across all of its share classes. And with an expense ratio of just 0.05%, it's all but free to own.

The Vanguard Total Bond Market Index Fund provides broad exposure to the universe of bonds. Approximately 46% of its portfolio is Treasury or agency debt backed by the U.S. government, and another 20% is invested in government mortgage-backed securities (MBSes). Industrial-sector corporate bonds make up a little over 15%, banks and financial institutions make up 9%, and the rest is spread across foreign bonds, utilities, and commercial mortgage backed securities (CMBSes).

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One of the most critical metrics to consider when considering bond funds is duration, which is a measure of interest-rate sensitivity. As an example, a bond with a duration of two years would see its price rise by 2% if interest rates fell by 1% (or conversely, would see its price fall by 2% if interest rates rose by 1%). The actual calculation of duration is fairly complex; it's the weighted average of the bond's cash flows. But the key takeaway is that, all else equal, the longer a bond's time to maturity, the higher its duration—and thus the higher the interest-rate risk.

The Vanguard Total Bond Market Index Fund, with a duration of 6.3 years, has a medium-term duration with only moderate interest-rate risk. So, apart from the 4%-plus yields, investors could enjoy respectable capital gains if market interest rates decline in the coming years in response to falling inflation.

If the $3,000 minimum is a problem, the exact same strategy is available via the Vanguard Total Bond Market ETF (BND), which charges an even cheaper 0.03% in annual expenses. At time of writing, a single share can be purchased for around $73.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

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<p>Like a high-interest savings account, a <b>money market account (MMA)</b> offers a generous interest rate on your deposits. You can open one of these accounts for a family member at several banks and credit unions. Many MMAs come with minimum balance requirements, and some offer tiered APYs that let your gift recipient earn a higher rate if they meet a set balance threshold.</p><p>The average APY on money market accounts with balances under $100,000 was just 0.07% in November, according to the FDIC. As of this writing, the <a href="https://wealthup.com/cit-bank-mma-link/" rel="nofollow sponsored noopener"><b>CIT Bank MMA</b></a> earned 1.55% on a minimum deposit of just $100.</p>

3. Vanguard Federal Money Market Fund (VMFXX)

-- Style: Money market

-- Assets under management: $276.5 billion

-- Expense ratio: 0.11%, or $1.10 per year for every $1,000 invested

-- SEC yield: 5.3%

Of course, interest rates can also go higher, in which case higher-duration bond funds can experience capital losses. That was certainly the case in 2022, when very long-term bonds actually saw greater losses than common stock indexes like the S&P 500.

If you are looking for a competitive yield with essentially no duration or interest rate risk at all, the Vanguard Federal Money Market Fund (VMFXX) is a solid option and one of the very best Vanguard retirement funds at today's prices. This income fund consists entirely of U.S. Treasury bills and other U.S. government obligations and repurchase agreements. This is an extremely conservative option with extremely limited possibility of loss.

Money market funds are very sensitive to Federal Reserve policy moves. It was barely two years ago that money market funds in general offered virtually nothing in yield. But after the most aggressive string of rate hikes in history, VMFXX is a legitimate income fund with a yield above 5%.

If, as is widely expected, the Fed starts lowering rates in 2024, VMFXX will see its own yield fall as its existing portfolio matures and is replaced with newer lower-yielding investments. If and when that day comes, you might want to re-evaluate your options. But until then, the Vanguard Federal Money Market Fund remains one of the very best Vanguard retirement funds for its low risk and competitive yield.

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<p><b>- Type: </b>Exchange-traded fund (ETF)</p><p><b>- Assets under management:</b> $100 billion</p><p><b>- Expense ratio:</b> 0.04%, or $4 per year for every $10,000 invested</p><p><b>- Dividend yield:</b> 0.6%</p><p>If you’re interested in growth potential but don’t only want to focus on smaller names, good news: You don’t have to.</p><p>As the name implies, the <b>Vanguard Growth ETF (VUG)</b> is one of the best index funds for investors looking at stocks with expanding sales and profits. But what the name doesn’t also tell you is that it mostly focuses on larger <i>growth</i> names.</p><p>There’s nothing wrong with sleepier stocks like utilities or companies that specialize in consumer staples like packaged foods or toiletries. But let’s face it: Americans aren’t going to double their consumption of electricity or canned goods anytime soon.</p><p>Fortunately, this <a href="https://wealthup.com/best-vanguard-index-funds-for-beginners/"><strong>Vanguard index fund</strong></a> is designed to focus on the stocks that <i>do</i> have potential for growth. For instance, technology stocks like Apple (AAPL) represent a whopping 45% of the entire portfolio at present. Big consumer names including Amazon.com (AMZN) and Home Depot (HD) also make up about 17% of VUG's assets.</p><p>With higher growth potential often comes higher risk. But putting your money into larger growth names helps defray some of the potential downsides. And if you’re planning to hold this index fund for the long term—a mindset new investors absolutely should adopt—then you can afford to ride out some of the day-to-day volatility in what’s still one of 2024’s best index funds for beginners.</p><p><a href="https://investor.vanguard.com/investment-products/etfs/profile/vug" rel="noopener"><b><i>Learn more about VUG at the Vanguard provider site.</i></b></a></p><p><b>Related: <a href="https://wealthup.com/best-stock-tracking-apps/">11 Best Stock Portfolio Tracking Apps [Stock Portfolio Trackers]</a></b></p>

4. Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX)

-- Style: U.S. dividend stock

-- Assets under management: $13.3 billion

-- Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested

-- Dividend yield: 1.9%

The first thing to note about the Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX) is that, despite its name, it's not an income-first fund. With a yield of just 1.9%, the dividend income is a little better than the S&P 500, but it's still almost an afterthought.

That said, VDADX is one of the very best Vanguard retirement funds precisely because income takes a back seat.

The fund tracks the performance of the S&P U.S. Dividend Growers Index, which is made up of U.S. companies that have increased their dividend payout every year for at least 10 consecutive years. As an additional filter, the index excludes the top 25% highest-yielding eligible companies from the index, as exceptionally high-yielding stocks are often at risk for dividend cuts.

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There is no better sign of company health than a long history of rising dividends. As the old Wall Street maxim goes: The safest dividend is the one that was just raised. Company boards only raise the dividend when they are confident they will have the cash to back it up.

As a general rule, you want diversified funds in a retirement portfolio, and VDADX certainly fits that bill. Technology, financials and health care are its three largest sector allocations at 23%, 19%, and 15%, respectively.

If the $3,000 minimum is a stretch on your budget, the same strategy is available via the Vanguard Dividend Appreciation ETF (VIG), which charges 0.06% in annual expenses and trades for around $170 per share.

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<p><b>Schwab Target Funds</b> currently range in five-year increments from 2010 to 2065, with new iterations added over time. And on the equity and fixed income securities subject (asset allocation), it's exactly what you might expect. Each target-date fund holds a mixture of stock mutual funds and fixed income mutual funds, with the percentage allocated to stocks gradually getting higher the further out the targeted retirement date is.</p><p>The idea is, the closer the retiree gets to retirement, the more the funds are designed to deliver income consistent with what the retiree needs to live in their post-salary years.</p><p>(Note: Most of the mutual funds owned by Schwab target-date mutual funds and stock and bond funds managed by Schwab internally, but certainly not all. Schwab will also regularly incorporate outside managers.)</p><p>Let's compare a handful of the funds.</p>

5. Vanguard Target Retirement Funds

-- Style: Target-date

-- Minimum initial investment: $1,000

One of the challenges in retirement planning is getting the asset allocation right, or having an asset class mix that is appropriate for an investor at your age and stage of life. An ideal portfolio for a 20-year-old is likely going to be very different from that of a 40-year-old, and both those portfolios will be different from what's ideal for a 60-year-old.

This is where Vanguard target retirement funds can really add value. Target-date funds—also called life-cycle funds—are a type of mutual fund that are designed to change their asset allocation over time. Target-date funds start out invested heavily in stocks and then slowly reduce their stock exposure and replacing it with bond exposure as they approach their target retirement date, following a glide path.

Beginner's Guide to Schwab Target-Date Funds

The target retirement dates are intended to be estimates; they don't have to be super precise. Generally, most mutual fund families will create target-date funds in five-year increments (say, 2025, 2030, 2035, etc.).

Vanguard is a strong player in this space, and the Vanguard Target Retirement Funds tend to be very competitive on price. The funds themselves typically hold both U.S. and international stocks of various sizes, as well as U.S. and international bonds.

For a longer primer on Vanguard Target Retirement Funds, take a look at our Beginner's Guide to Vanguard Target-Date Funds .

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SoFi

Invest in These and Other Funds With SoFi IRAs

If you're an existing SoFi customer, you should consider signing up for retirement accounts (such as a traditional IRA or Roth IRA) through SoFi Invest .

SoFi offers two options catering to different investment styles. Its active investing option lets you choose and manage your own investments. And with its automated investing option, SoFi will select and manage investments on your behalf.

You won’t pay management fees with either account option, and SoFi doesn’t charge commissions for stock or ETF trading. Several other investment choices are also available, including options and margin trading. However, underlying fund fees may apply depending on the investments you choose, and you will have to pay a modest $20 fee to close your account.

And if you're not an existing SoFi customer? Consider opening up an account today. SoFi also offers perks to its banking customers, including no annual or opening fees on many different account types.

faq question market cards

What Is the Minimum Investment Amount on Vanguard Mutual Funds?

Vanguard funds are known for being shareholder-friendly. The Vanguard mutual fund company blazed new trails with the index fund, and Vanguard has done more than any other investment firm to keep costs to a minimum for investors.

But there is one hitch. Many of Vanguard's cheapest funds in terms of fees have initial investment minimums of around $3,000.

If that is a problem for you, don't sweat it. Most popular Vanguard index funds are also available as ETFs. Most brokers will allow you to buy as little as one share, and some even allow for fractional shares . And if you use a commission-free brokerage , you can buy those ETFs without incurring additional fees. ETF prices vary, of course, but many cost less than $100, and they rarely exceed $400 per share.

<p>Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your <b>expense ratios</b> to an absolute minimum.</p><p>The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don't have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.</p><p>This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.</p>

Why Does a Fund's Expense Ratio Matter so Much?

Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don't have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.

This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.

<p>Being a discerning investor is, for better or worse, all about the homework. If you’re “doing it right,” you’re culling through useful information regularly on stock analysis websites, stock news apps, research reports and other valuable information.</p><p>Being a data-driven investor myself, I love these kinds of tools. So let me share with you <a href="https://wealthup.com/best-stock-investment-research-websites-software/"><strong>my favorite investment research software, stock research websites and informational apps</strong></a>.</p>

15 Best Investing Research & Stock Analysis Websites

Being a discerning investor is, for better or worse, all about the homework. If you’re “doing it right,” you’re culling through useful information regularly on stock analysis websites, stock news apps, research reports and other valuable information.

Being data-driven investors ourselves, we love these kinds of tools. So let us share with you our favorite investment research software, stock research websites and informational apps .

<p>So, you want to start investing, and you've saved up a little money to put toward your future. Great! All you really need to do now is find an investment app—preferably one geared toward a beginner like yourself.</p><p>But what exactly does that look like? We can give you an idea. Check out our rundown of the <a href="https://wealthup.com/best-investment-apps-for-beginners/"><strong>best investment apps for beginners</strong></a>, complete with features, investible assets, pros, cons, and more.</p>

The 13 Best Investment Apps for Beginners

So, you want to start investing, and you've saved up a little money to put toward your future. Great! All you really need to do now is find an investment app—preferably one geared toward a beginner like yourself.

But what exactly does that look like? We can give you an idea. Check out our rundown of the best investment apps for beginners , complete with features, investible assets, pros, cons, and more.

<p>There are few better ways of turbo-charging a new investment account than snagging some free stocks right off the bat.</p><p>Sound too good to be true? Believe it or not, it's completely normal for brokerages and investment apps to give out free stocks. Check out our list of <a href="https://wealthup.com/free-stocks/"><strong>apps that offer free stocks just for signing up</strong></a>. (And importantly: These are apps you'll want to keep using, even after you've locked in your freebees!)</p>

How to Get Free Stocks for Signing Up: 15 Apps w/Free Shares

There are few better ways of turbo-charging a new investment account than snagging some free stocks right off the bat.

Sound too good to be true? Believe it or not, it's completely normal for brokerages and investment apps to give out free stocks. Check out our list of apps that offer free stocks just for signing up . (And importantly: These are apps you'll want to keep using, even after you've locked in your freebees!)

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boglehead funds

Investor Resources

What is the bogleheads guide to investing.

boglehead funds

What is the Bogleheads Guide to Investing?

Welcome to The Bogleheads Guide to Investing.  In this Blog we’ll cover the top 10 investing principles of Bogleheads.  T hese principles are based on patience, discipline, and the power of compounding interest.  They are designed to help investors achieve their financial goals over the long term.

Before you jump into buying stocks and bonds, invest time into your PLAN upfront.  Now, let’s break down each of these principles including how I’ve applied them to my investing success.

The AssetRise community is built upon the Bogleheads investment fundamentals below.  AssetRise Portfolio Management is designed specifically to manage, track, and optimize Vanguard Boglehead portfolios.

Bogleheads Investing Principles

Workable plan.

A workable plan is a comprehensive financial plan that is tailored to your financial goals and risk tolerance. It should include a budget, an emergency fund, and a retirement plan. The plan should be reviewed and updated regularly to ensure that it remains relevant.

Each Boglehead develops a unique plan called an IPS.  An Investment policy statement (IPS)  is a statement that defines your general investment goals and objectives. It describes the strategies that you will use to meet these objectives, and contains specific information on subjects such as  asset allocation ,  risk tolerance, and liquidity requirements. 

The first step in investing as a Boglehead is to write down your IPS then stick to it.  This will be critical as you navidate the highs and lows of investing.

Here is an IPS example for you to use

Too many investors fail since they have no plan.  They simply jump into buying the latest stock or chase past performance.  Nobody can predict the future, so build you plan and stick to it.

Invest Early and Often

Once you have a regular savings pattern, you can begin accumulating financial wealth. How much saving is enough? For retirement, 20% of income may be a good starting point, but this will vary widely from person to person. If you want to be retire before age 65, or plan to leave significant assets to charity or to children, you probably need to save even more.  Starting a regular savings plan early in life is important because investment returns compound over a longer period. 

The image below demonstrates the benefit of starting early.

File:Young early.jpg

The best way to save money is to arrange automatic deductions from your paycheck. Many  401(k)s  offer this. When you invest in an  IRA  or taxable account, choose a provider that will automatically deduct money from your bank account the day after pay day. This is described as “paying yourself first,” and it goes a long way towards establishing and reinforcing reasonable spending habits.

There are  guidelines  for which accounts you should fund and in what order. But always remember, you first need to save the money. When you start, saving regularly is more important than your choice of investments.  

Bearing Risk

Your risk tolerance is your ability to stick to an investment plan through difficult financial and market conditions. To know if an asset allocation matches your risk tolerance, ask yourself if you held it, would you sell during the next bear market? This is very hard to answer honestly before you have experienced one.

In Bogleheads investing philosophy, it’s important to invest in a way that is appropriate for your financial situation and goals . This means that you should never bear too much or too little risk. Investing too conservatively can result in lower returns, while investing too aggressively can lead to higher risk and potential losses.

To determine the appropriate level of risk for your investments, you should consider your financial goals, time horizon, and risk tolerance. If you’re investing for a long-term goal, such as retirement, you may be able to tolerate more risk than if you’re investing for a short-term goal, such as a down payment on a house. It’s important to find a balance between risk and reward that is appropriate for your individual situation.

To give you enough money for retirement, you want assets with a decent expected return. This means you need to own  stocks . Stocks return a share of the profits generated by publicly owned companies. But although they offer a chance of good returns, stocks are volatile and risky. In 2008, some markets fell 50% from their previous highs. Over time, stock prices roughly follow the trend of the economy, which is to grow. But prices can stagnate or decline for decade-long periods. This is why your  asset allocation needs to include bonds as well as stocks.  Boglehead philosophy is to buy stocks in a well diversified, low cost Index Fund. 

The most popular stock fund is the Vanduard VTI ETF: Vanguard Total Stock Market Index Fund ETF consisting of over 3,000 U.S. stocks.

Bonds are a promise to pay back a loan of money on a set schedule. Bonds do not have the expected returns of stocks, but they are much less volatile. A mix of stocks and bonds will produce reasonable growth while limiting the size of the inevitable drops.  How much in bonds? This is the basic question of asset allocation. Before you decide, you first need to balance your ability, willingness, and need to take  risk . The more risk you can handle, the less bonds you need. When you are young, your prime earning years lie ahead, and it will be decades before you need to access the money. So, higher stock allocations may be suitable, because big drops in stock prices will not hurt as long as you do not sell during the drop.

John Bogle  wrote: [2]

[A]s we age, we usually have (1) more wealth to protect, (2) less time to recoup severe losses, (3) greater need for income, and (4) perhaps an increased nervousness as markets jump around. All four of these factors suggest more bonds as we age. —  Common Sense on Mutual Funds , John Bogle

Although your exact asset allocation should depend on your goals for the money, there are a few general guidelines that you can follow. These are based on practice rather than on theory, and are only a starting point for decision making, not the end.

For example,  Benjamin Graham  wrote: [3]

We have suggested as a fundamental guiding rule that the investor should never have less than 25% or more than 75% of his funds in common stocks, with a consequence inverse range of 75% to 25% in bonds. There is an implication here that the standard division should be an equal one, or 50-50, between the two major investment mediums. —  Quoted in  The Intelligent Investor , Jason Zweig

Alternatively,  John Bogle  recommends “ roughly your age in bonds “. For instance, if you are 45, 45% of your portfolio should be in high-quality bonds. He describes the idea as just “ a crude starting point ” which “ [c]learly … must be adjusted to reflect an investor’s objectives, risk tolerance, and overall financial position “. He also suggests that you should treat any national or state retirement income you might receive as if it is a bond, setting its assumed value appropriately.

This “ age in bonds ” and its variants, age minus ten years or age minus twenty years, are only approximate starting points. You will probably want to adjust them to fit your circumstances. For example, if you have a guaranteed state or other pension, this changes both your need and your willingness to take risk. Some investors do not add pensions and Social Security to their asset allocation of bond holdings.

It is easy to underestimate risk and to overestimate your tolerance for risk. In 2008, many people learned too late that they should have been holding more bonds. Think carefully before choosing an asset allocation with high stock market allocations. If you have not been through a major market downturn before, your abstract logical thoughts about risk can quickly become emotional ones. The developing field of neuroeconomics explains how mental traits and emotional effects that work well in other areas undermine our ability to deal rationally with markets and investing.

You should generally own bond funds  instead of individual bonds , for convenience and diversification. Using individual  corporate  or  municipal  bonds require a very large holding in order to achieve the broad diversification and increased safety of a bond fund. The high number of different bonds in bond funds lets you ignore the risk of any one bond defaulting. You can manage  Interest rate risk  by choosing funds with short and intermediate-term  duration , and  default risk  by choosing funds with high credit ratings. The idea here is for your bond holdings to reduce violent up and down swings in overall portfolio value. You want your risks on the equity side, not the bond side.

The most popular Bogleheads bond fund is the ETF BND: Vanguard Total Bond Market for its low cost and diversification.

Never Try to Time the Market

According to the Bogleheads investing philosophy, it’s important to avoid trying to time the market.  This means that investors should not attempt to predict the market’s ups and downs and make investment decisions based on those predictions. Instead, investors should focus on creating a well-diversified portfolio that is appropriate for their financial situation and goals.

The Bogleheads believe that trying to time the market is a losing proposition because it’s impossible to predict the future direction of the market with any degree of accuracy.  Instead, investors should focus on the long-term and remain disciplined in their approach. By investing regularly and staying the course, investors can achieve their financial goals over the long term.

Check out this article: Vanguard S&P 500 ETF VOO outperforms actively managed funds 11 consecutive years.

Use Index Funds When Possible

According to the Bogleheads investing philosophy, it’s recommended to use index funds when possible.  Why use Indx Funds vs. Individual Stocks?  Index funds are low-cost and provide broad market exposure.  They are designed to track the performance of a specific market index, such as the S&P 500, and are passively managed. This means that they have lower fees than actively managed funds, which can help to keep investment costs low.

The Bogleheads believe that using index funds is a simple and effective way to build a diversified portfolio that is appropriate for your financial situation and goals.  By investing in index funds, you can gain exposure to a wide range of stocks or bonds with minimal effort. This can help to reduce risk and increase returns over the long term.

The 5 most common Index Funds used by Bogleheads are:

  • VTI: Vanguard Total Stock Market Index Fund ETF
  • VXUS: Vanguard Total International Stock Index Fund ETF
  • BND: Vanguard Total Bond Market Index Fund ETF
  • VNQ: Vanguard Real Estate Index Fund ETF
  • VOO: Vanguard 500 Index Fund ETF  

Learn more about how to structure your portfolio by using an Investment Portfolio Asset Allocation strateg y.

Keep Costs Low

According to the Bogleheads investing philosophy, it’s important to keep costs low when investing . This means that investors should avoid high-fee funds and unnecessary trading. By minimizing investment costs, investors can keep more of their returns and achieve their financial goals over the long term.

The Bogleheads believe that using low-cost index funds is an effective way to keep investment costs low . Index funds are passively managed and have lower fees than actively managed funds. This can help to reduce investment costs and increase returns over the long term.

According to the Bogleheads investing philosophy, diversification is a crucial component of a successful investment strategy.  The Bogleheads recommend spreading your investments across different asset classes to reduce risk. This means investing in a variety of stocks, bonds, and other securities.

The Bogleheads believe that diversification can help to reduce risk and increase returns over the long term.  By investing in a variety of asset classes, you can reduce the impact of any one investment on your overall portfolio. This can help to minimize the impact of market volatility and reduce the risk of significant losses.

Minimize Taxes

According to the Bogleheads investing philosophy, minimizing taxes is an important aspect of a successful investment strategy.  Here are some ways to minimize investment-related taxes:

  • Maximize contributions to tax-sheltered accounts: Contributing to tax-sheltered accounts such as 401(k)s, IRAs, and HSAs can help to reduce your taxable income and lower your tax bill.
  • Invest tax-efficiently within taxable accounts: By investing in tax-efficient funds and holding them for the long term, you can minimize the amount of taxes you owe on your investments.
  • Pay attention to “asset location”: By placing tax-inefficient assets such as bonds in tax-sheltered accounts and tax-efficient assets such as stocks in taxable accounts, you can further reduce your tax bill.
  • “Back Door Roth”: Use Traditional IRA to fund the Roth IRA one time per account annually.

Invest with Simplicity

The Bogleheads believe that keeping your investment strategy simple and easy to understand can help you stay disciplined and avoid making impulsive decisions based on short-term market movements.

One way to invest with simplicity is to create a three-fund portfolio that includes a total stock market index fund such as VTI, a total international stock index fund such as VXUS, and a total bond market fund such as BND.  This approach is designed to provide broad market exposure while keeping investment costs low. 

By investing with simplicity, you can avoid the complexity and confusion that can come with more complicated investment strategies. This can help you stay focused on your long-term financial goals and achieve success over the long term.

For seasoned investors this level of simplicity will seem counterintuitive.  However the data shows that a simple portfolio of low cost ETF Indes will outperform a stock pickers portfolio over the long term.  

And…Stay the Course!

Look, investing is a very empotional game as you are playing with your hard earned savings.  Bogleheads believe that its critical that investors should stick to their investment plan and avoid making impulsive decisions based on short-term market movements.

The Bogleheads believe that staying the course is important because it helps investors avoid the temptation to buy and sell based on emotions rather than logic.  By remaining disciplined and focused on their long-term financial goals, investors can achieve success over the long term.

Wrapping it Up

I’ve been a Boglehead investor for over 10 years, by following these principles I have grown significant wealth over time.  I’m very fortunate to have discovered the Boglehead investing principles at a young age after trying 2 failed investment advisors.

While you don’t need to put 100% of your investments into a Bogleheads portfolio, I hope you consider adding your “core” investments into it.  You will be thankful over time.

Michael

About AssetRise

AssetRise provides Boglehead, Vanguard, and FIRE investors portfolio allocation and rebalance tools to simplify investing and increase returns.  AssetRise provides an industry leading portfolio rebalance calculator to increase investor returns.

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How to get out of bond "funds"

Post by ebeb » Thu Oct 19, 2023 3:42 pm

Re: How to get out of bond "funds"

Post by Johm221122 » Thu Oct 19, 2023 3:47 pm

Post by bberris » Thu Oct 19, 2023 3:52 pm

Post by jebmke » Thu Oct 19, 2023 4:38 pm

bberris wrote: ↑ Thu Oct 19, 2023 3:52 pm Even treasuries with their supposed deep liquidity can be difficult or expensive to sell for individual investors.

Post by ebeb » Thu Oct 19, 2023 4:44 pm

jebmke wrote: ↑ Thu Oct 19, 2023 4:38 pm I've not heard that nor has that been my experience, even with Tips, much less nominal Treasury notes.

Post by Tom_T » Thu Oct 19, 2023 4:46 pm

jebmke wrote: ↑ Thu Oct 19, 2023 4:38 pm bberris wrote: ↑ Thu Oct 19, 2023 3:52 pm Even treasuries with their supposed deep liquidity can be difficult or expensive to sell for individual investors.

Post by SantaClaraSurfer » Thu Oct 19, 2023 4:57 pm

  • First I calculated my initial cost basis for each of these three investments. (ie. The funds I invested in each bond fund minus the reinvested dividends.)
  • Second, I measured how much I was down from my initial investment in each mutual fund excluding reinvested dividends, and then stack-ranked the funds from least down to most down.
  • Third, while I continued to reinvest dividends in the fund with the least losses, I set the other two funds to pay their dividends in cash and used that cash, once a month, to purchase more of the "least down" fund. (This takes five minutes.)
  • Once I have caught up my initial basis in the "least down" fund (ie. NOT by the brokerage calculation, but by my own calculation of my initial investments), I will repeat the process for the next fund.

Post by jebmke » Thu Oct 19, 2023 5:00 pm

Tom_T wrote: ↑ Thu Oct 19, 2023 4:46 pm jebmke wrote: ↑ Thu Oct 19, 2023 4:38 pm bberris wrote: ↑ Thu Oct 19, 2023 3:52 pm Even treasuries with their supposed deep liquidity can be difficult or expensive to sell for individual investors.

Post by JonFund » Thu Oct 19, 2023 5:08 pm

Post by Tamalak » Thu Oct 19, 2023 5:14 pm

Post by Call_Me_Op » Fri Oct 20, 2023 1:08 am

Post by Hyperchicken » Fri Oct 20, 2023 1:52 am

Post by Northern Flicker » Fri Oct 20, 2023 4:49 am

Hyperchicken wrote: If all your bond funds magically converted to cash today, what would you do? If you would rebuy the same funds right away, then continue holding them. If you would invest in something else, then sell the bond funds and buy that something else as soon as the market opens.

Post by N.Y.Cab » Fri Oct 20, 2023 12:02 pm

Post by Brian96 » Fri Oct 20, 2023 1:23 pm

N.Y.Cab wrote: ↑ Fri Oct 20, 2023 12:02 pm I would take my time but not years, maybe 3 to 9 months to convert to individual bonds. With the inverted yield curve, it's fine to start with short term bonds then extend it over time to the desired duration.

Post by Call_Me_Op » Fri Oct 20, 2023 1:26 pm

Brian96 wrote: ↑ Fri Oct 20, 2023 1:23 pm N.Y.Cab wrote: ↑ Fri Oct 20, 2023 12:02 pm I would take my time but not years, maybe 3 to 9 months to convert to individual bonds. With the inverted yield curve, it's fine to start with short term bonds then extend it over time to the desired duration.

User avatar

Post by jeffyscott » Fri Oct 20, 2023 1:42 pm

Tamalak wrote: ↑ Thu Oct 19, 2023 5:14 pm You can't cleanly duration match with bond funds. So if you have a big expense coming up in 7 years, and you need your money to be available, then a 7 year treasury would be perfect.. but a "7 year treasury fund" would not because it's continuously refreshing the duration. You're very LIKELY to at least break even and probably profit within 7 years of a 7 year fund, but it's not a guarantee. If you don't have a clear cut schedule when you need money and just want to generally manage duration risk, a bond fund is fine and much more convenient than managing your own ladder. I do feel like bond funds have been unfairly singled out for bad performance in this last couple years compared to individual bonds. Individual bonds have lost just as much NAV as bond funds, but there is a psychological trick people pull with individual bonds ("the money is guaranteed to come back") that is equally true with bond funds, just a little messier.

Post by Brian96 » Fri Oct 20, 2023 4:07 pm

Call_Me_Op wrote: ↑ Fri Oct 20, 2023 1:26 pm Brian96 wrote: ↑ Fri Oct 20, 2023 1:23 pm N.Y.Cab wrote: ↑ Fri Oct 20, 2023 12:02 pm I would take my time but not years, maybe 3 to 9 months to convert to individual bonds. With the inverted yield curve, it's fine to start with short term bonds then extend it over time to the desired duration.

Post by chuckwalla » Fri Oct 20, 2023 5:01 pm

Post by ebeb » Fri Oct 20, 2023 5:36 pm

chuckwalla wrote: ↑ Fri Oct 20, 2023 5:01 pm Which individual bonds would you buy after getting out of the bond fund?

Post by coachd50 » Sat Oct 21, 2023 2:16 pm

Post by beardsicles » Sat Oct 21, 2023 2:24 pm

coachd50 wrote: ↑ Sat Oct 21, 2023 2:16 pm Tamalak wrote: ↑ Thu Oct 19, 2023 5:14 pm You can't cleanly duration match with bond funds. So if you have a big expense coming up in 7 years, and you need your money to be available, then a 7 year treasury would be perfect.. but a "7 year treasury fund" would not because it's continuously refreshing the duration. You're very LIKELY to at least break even and probably profit within 7 years of a 7 year fund, but it's not a guarantee. If you don't have a clear cut schedule when you need money and just want to generally manage duration risk, a bond fund is fine and much more convenient than managing your own ladder. I do feel like bond funds have been unfairly singled out for bad performance in this last couple years compared to individual bonds. Individual bonds have lost just as much NAV as bond funds, but there is a psychological trick people pull with individual bonds ("the money is guaranteed to come back") that is equally true with bond funds, just a little messier.

Post by jeffyscott » Sat Oct 21, 2023 2:43 pm

coachd50 wrote: ↑ Sat Oct 21, 2023 2:16 pm Many posts talking about how if you "need money in 10 years, put it in ________", but I hardly ever see any discussion or mention that after that initial investment, you need the money in 9 years. Then 8, then 7 etc. I don't see many discussions about how to deal with the constant duration of bond funds with the changing timeline of the investor's needs.

Post by magua » Sat Oct 21, 2023 2:52 pm

Post by sycamore » Sat Oct 21, 2023 3:09 pm

magua wrote: ↑ Sat Oct 21, 2023 2:52 pm The main use case for individual bonds is matching duration. However, I rarely see people who actually have this use case. It's unusual to see "I will spend this exact pool of money in exactly X months".

Post by Parkinglotracer » Sat Oct 21, 2023 3:10 pm

Northern Flicker wrote: ↑ Fri Oct 20, 2023 4:49 am Hyperchicken wrote: If all your bond funds magically converted to cash today, what would you do? If you would rebuy the same funds right away, then continue holding them. If you would invest in something else, then sell the bond funds and buy that something else as soon as the market opens.

Post by ebeb » Sat Oct 21, 2023 7:51 pm

magua wrote: ↑ Sat Oct 21, 2023 2:52 pm This piece of your statement is objectively wrong: "Those who think bonds and bond funds are fundamentally different and funds have lot of interest risks .... "

Post by Paisley » Sat Oct 21, 2023 8:03 pm

Post by magua » Sun Oct 22, 2023 8:39 pm

ebeb wrote: ↑ Sat Oct 21, 2023 7:51 pm magua wrote: ↑ Sat Oct 21, 2023 2:52 pm This piece of your statement is objectively wrong: "Those who think bonds and bond funds are fundamentally different and funds have lot of interest risks .... "
  • Let's say you buy an individual 5 year bond. After 1 year, you now hold a 4 year bond. After 2 years, you now hold a 3 year bond. After 3 years, you now hold a 2 year bond. After 4 years, you now hold a 1 year bond. After 4.5 years, you now hold a 6 month bond.

Post by coachd50 » Sun Oct 22, 2023 8:52 pm

magua wrote: ↑ Sun Oct 22, 2023 8:39 pm ebeb wrote: ↑ Sat Oct 21, 2023 7:51 pm magua wrote: ↑ Sat Oct 21, 2023 2:52 pm This piece of your statement is objectively wrong: "Those who think bonds and bond funds are fundamentally different and funds have lot of interest risks .... "

Post by kacang » Mon Oct 23, 2023 8:32 am

User avatar

Post by illumination » Mon Oct 23, 2023 7:58 pm

Post by Paisley » Wed Oct 25, 2023 1:00 pm

Post by dbr » Wed Oct 25, 2023 1:34 pm

illumination wrote: ↑ Mon Oct 23, 2023 7:58 pm You don't get some sort of future bonus for staying in bond funds that previously lost money. To flip it around, let's say a person bought an individual 10 year treasury in 2020 at a 1.00% interest rate and held on until today. That "potential" money versus a 10 year today is simply gone, they made a bad bet if they decide to sell now. In fact, it could even go lower. If you now don't like bond funds (I'm in that camp) just sell and move to things where you can't lose principal and take it as a lesson learned would be my advice.

Post by patrick » Wed Oct 25, 2023 4:13 pm

Post by ebeb » Wed Oct 25, 2023 4:18 pm

patrick wrote: ↑ Wed Oct 25, 2023 4:13 pm And the floating-rate bonds are highly illiquid -- no quotes are available at all!

Post by patrick » Wed Oct 25, 2023 4:34 pm

ebeb wrote: ↑ Wed Oct 25, 2023 4:18 pm patrick wrote: ↑ Wed Oct 25, 2023 4:13 pm And the floating-rate bonds are highly illiquid -- no quotes are available at all!

Post by ebeb » Wed Oct 25, 2023 4:45 pm

Post by patrick » Wed Oct 25, 2023 4:57 pm

ebeb wrote: ↑ Wed Oct 25, 2023 4:45 pm Schwab has 1 bid/ask for CUSIP 91282CFS5: Sell 250 30000 100.070 -- Buy 250 30000 100.148 -

Post by ebeb » Wed Oct 25, 2023 5:03 pm

Post by ShaftoesSpreadsheet » Wed Oct 25, 2023 5:21 pm

ebeb wrote: ↑ Thu Oct 19, 2023 3:42 pm Hi Bond Experts, There has been endless debates on the pros/cons about bonds, bond ladders and bond funds after the bond crash of 2022. There seems to be two camps of Bogleheads: Camp1: Those who think bonds and bond funds are mostly equivalent if of similar duration and just hang in there until average duration to recover fully. Camp2: Those who think bonds and bond funds are fundamentally different and funds have lot of interest and constant duration risks so not worth using bond funds. Not trying to debate which camp is right/wrong here. But in case someone was in Camp1 earlier and now preferring Camp2 what are optimal ways to move from funds to actual bonds. For example: - Sell all bond funds at once and invest the proceeds into treasuries, bonds or ladders of similar durations. Will help with TLH and long term similar returns but short term big losses in non-retirement taxable accounts. - Sell the funds slowly over multiple years and invest like above into bonds which gives time to recover somewhat with less losses and less TLH. - Do nothing until the funds have recovered fully before making any move to bonds Thoughts?

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  2. Bogleheads Investing Advice and Info

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  5. The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple

    Amazon.com: The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk: 9781119487333: Larimore, Taylor, Bogle, John C.: Books Books › Business & Money › Investing Enjoy fast, free delivery, exclusive deals, and award-winning movies & TV shows with Prime

  6. Bogleheads University

    Bogleheads University is a collection of presentations illustrating Bogleheads Principles of Investing which provide a framework for understanding the basics, in addition to coverage of more advanced topics such as Social Security, retirement tax planning and real estate and factor investing.

  7. A Boglehead explains the simplest way to manage your money

    Finally, he settled on the three-fund approach — a total-market U.S. stock-index fund US:VTSMX, a total-market U.S bond-index fund US:VBTLX and a total-market international-stocks index...

  8. Bogleheads 3 and 4 Fund Portfolio: Backtest and Performance Analysis

    The Bogleheads 3 Fund Portfolio is a low-cost investment strategy that was popularized by the Bogleheads, a group of investors who follow the philosophy of investing legend Jack Bogle. The strategy involves investing in three index funds that provide broad exposure to the stock and bond markets. The three funds are:

  9. Bogleheads Three Funds Portfolio: ETF allocation and returns

    The Bogleheads Three Funds Portfolio has the following asset allocation: 80% Stocks 20% Fixed Income 0% Commodities The Bogleheads Three Funds Portfolio can be implemented with the following ETFs: Most of Lazy Portfolios are made of common components (asset classes), very simple and well defined.

  10. Bogleheads 3 Fund Portfolio Review and Vanguard ETFs (2024)

    What Is the Bogleheads 3 Fund Portfolio? The Bogleheads 3 Fund Portfolio is arguably the most popular lazy portfolio, which just means a portfolio that you don't need to constantly monitor or change. "Bogleheads" are followers of the advice and path of the famous Jack Bogle, founder of Vanguard and considered the father of index investing.

  11. What Is A Boglehead And What Investing Lessons Can You Learn?

    How to be a Boglehead. Bogleheads invest and keep it simple by buying mutual funds or ETFs that try to mimic the entire market. Or, to build a proper asset allocation for their own individual needs, they may buy a stock mutual fund and bond mutual fund to be diversified in both asset classes. When buying these funds, they pay special attention ...

  12. Mutual funds for Bogleheads

    Three indexed bond funds: a total bond market index fund (SWAGX), a short-term aggregate bond fund (SWSBX) and an intermediate TIPS (Treasury Inflation Protected Security) fund (SWRSX). [3] Tax-free bond funds: A national Tax-Free Bond Fund (SWNTX) and the California Tax-Free Bond Fund (SWCAX). [3]

  13. Boglehead 3-Fund Portfolio for Beginners

    The Boglehead 3 Fund Portfolio comprises US total stock market, total international stock market, and total bond market index funds. Each component offers exposure to specific global market segments and is designed to capture the entire global stock market and the US bond market.

  14. Bogleheads 4 Fund Portfolio Review and Vanguard ETFs To Use

    The Bogleheads 4 Fund Portfolio, as the name suggests, is comprised of 4 funds capturing U.S. stocks, U.S. bonds, international stocks, and international bonds. This gets you fully diversified globally across all styles and cap sizes for stocks and bonds. Let's look at the specific assets. Stocks

  15. Passive Indexing Community for Long-Term Lazy Investors

    Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify and let compounding grow wealth. Jack founded Vanguard and pioneered indexed mutual funds. His work has since inspired others to get the most out of their long-term stock and bond investments by indexing. Active managers want your money - our advice: keep it! How? Investing in broad-market (MF or ...

  16. Bogleheads 3 Fund Portfolio

    Get this portfolio here: http://optimizedportfolio.com/go/bh-3-fundThe Bogleheads 3 Fund Portfolio is probably the most popular lazy portfolio out there. In ...

  17. Bogleheads Stay the Course

    Bogle, who died in January 2019, founded Malvern, Pa.-based Vanguard in 1974. Two years later, he launched the first publicly available index fund, which followed the S&P 500 index. Wall Street ...

  18. What Is the Bogleheads' 3-Fund Portfolio?

    This type of investment portfolio was popularized by the Bogleheads, a group of superfans for Jack Bogle, the founder of the Vanguard Group and creator of the index mutual fund. Its thesis is this ...

  19. Bogleheads® investment philosophy

    The Bogleheads follow a few simple investment principles that have historically produced risk-adjusted returns that are better than the returns of average investors. These principles are the results of Nobel prize-winning research on Modern Portfolio Theory and the Capital Asset Pricing Model.

  20. Bogleheads Forum

    Chilly silence—even though, paradoxically, a Boglehead forum fund favorite is Vanguard Wellesley (VWIAX), which "gets a pass" even though it's an actively managed fund, heavily bond-weighted. I won't complain too much though, as the site's many merits more than compensate. And credit goes to the numerous frequent posters who ...

  21. Want to Retire Like a Boglehead? 5 Low-Cost Vanguard Funds

    The company's low-cost legacy continues today via an ever-expanding suite of Vanguard mutual funds, and those savings can be had not just in indexed products, but even its actively managed ...

  22. What is the Bogleheads Guide to Investing

    The Bogleheads believe that using index funds is a simple and effective way to build a diversified portfolio that is appropriate for your financial situation and goals. By investing in index funds, you can gain exposure to a wide range of stocks or bonds with minimal effort. This can help to reduce risk and increase returns over the long term.

  23. Leaving my broker, invest entire retirement money ...

    New member here and I am interested in rolling all of our retirement money into a Vanguard 3-fund portfolio (Total US Stock Market Index, Total Int'l Stock Market Index and Total Bond Market Index). ... ↳ The Bogleheads® Wiki: a collaborative work of the Bogleheads community; ↳ Canada - finiki (wiki) Community; ↳ Personal Consumer Issues;

  24. How to get out of bond "funds"

    Joined: Sat Dec 23, 2017 7:18 pm How to get out of bond "funds" by ebeb » Thu Oct 19, 2023 3:42 pm Hi Bond Experts, There has been endless debates on the pros/cons about bonds, bond ladders and bond funds after the bond crash of 2022. There seems to be two camps of Bogleheads: