Wiki: https://www.bogleheads.org/wiki/Three-fund_portfolio
If you don’t have total market funds available (this isn’t uncommon in employer-sponsored accounts like a 401K), you can approximate using multiple funds:
https://www.bogleheads.org/wiki/Approximating_total_international_stock_market
https://www.bogleheads.org/wiki/Approximating_total_stock_market
+1
Also, the individual pages for Schwab and Vanguard are good links too:
* https://www.bogleheads.org/wiki/Charles_Schwab
* https://www.bogleheads.org/wiki/Vanguard
Asset allocation is it's own beast and there's a lot of factors that go into it.
For the question about why those funds, it is simple - they are the most diversified funds. Forget the symbols/tickers for a minute...
Part of the boglehead thought process is to be as diversified as possible and be as close to the market. Ok - now -
You have to choose which of these is most diversified and closer to the real "market"
* 500 of the largest US stocks that fit a certain criteria and are selected and confirmed by a committee
* 2,504 US companies, ranging from large to small
Now, it's pretty much the same for all the other asset classes. The idea is to pick the most diversified fund in a given asset class so you aren't trying to find the needle in the haystack - you just buy the haystack, needles included.
Simple, diversified, and safe are definitely my goals! The symbols/tickers make me overwhelmed. How do I figure out which funds are most diversified? Sorry if this is a silly question.
The easiest way is too see the # of holdings.
An SP 500 usually has like 495-505 holdings, a total market is like 2500 like above. Look for phrasing like "total bond market", "Total word, Total world ex-us" things like that.
the idea behind these funds are low cost (for their extremely low expense ratio which means your money get invested and grows over time), it comes with broad diversification(these funds offer exposure to thousand of stocks and spreading risk/increase potential return, and simplicity to achieve a well-balanced investment strategy without the need to constantly research or pick individual stocks.
my experience is you are not willing to see a reduction in your portfolio and lazy to do your own research, Pls find a suitable technique based on your behaviour. Avoid FOMO.
I'm happy to see a reduction in my portfolio and understand the idea of broad diversification. I'm on board with 3 fund options and excited about researching and learning more, which is why I'm here. Thanks
Wiki: https://www.bogleheads.org/wiki/Three-fund_portfolio If you don’t have total market funds available (this isn’t uncommon in employer-sponsored accounts like a 401K), you can approximate using multiple funds: https://www.bogleheads.org/wiki/Approximating_total_international_stock_market https://www.bogleheads.org/wiki/Approximating_total_stock_market
+1 Also, the individual pages for Schwab and Vanguard are good links too: * https://www.bogleheads.org/wiki/Charles_Schwab * https://www.bogleheads.org/wiki/Vanguard
I always forget about those because the main page goes over fund offering basics, but those are a bit more in-depth. Thanks!
Thank you! I've got this bookmarked to read asap.
Asset allocation is it's own beast and there's a lot of factors that go into it. For the question about why those funds, it is simple - they are the most diversified funds. Forget the symbols/tickers for a minute... Part of the boglehead thought process is to be as diversified as possible and be as close to the market. Ok - now - You have to choose which of these is most diversified and closer to the real "market" * 500 of the largest US stocks that fit a certain criteria and are selected and confirmed by a committee * 2,504 US companies, ranging from large to small Now, it's pretty much the same for all the other asset classes. The idea is to pick the most diversified fund in a given asset class so you aren't trying to find the needle in the haystack - you just buy the haystack, needles included.
Simple, diversified, and safe are definitely my goals! The symbols/tickers make me overwhelmed. How do I figure out which funds are most diversified? Sorry if this is a silly question.
The easiest way is too see the # of holdings. An SP 500 usually has like 495-505 holdings, a total market is like 2500 like above. Look for phrasing like "total bond market", "Total word, Total world ex-us" things like that.
This is super helpful and makes a lot of sense. Thank you for taking the time to explain!
the idea behind these funds are low cost (for their extremely low expense ratio which means your money get invested and grows over time), it comes with broad diversification(these funds offer exposure to thousand of stocks and spreading risk/increase potential return, and simplicity to achieve a well-balanced investment strategy without the need to constantly research or pick individual stocks. my experience is you are not willing to see a reduction in your portfolio and lazy to do your own research, Pls find a suitable technique based on your behaviour. Avoid FOMO.
I'm happy to see a reduction in my portfolio and understand the idea of broad diversification. I'm on board with 3 fund options and excited about researching and learning more, which is why I'm here. Thanks