There have only been a handful of investors in history who have beaten index funds. As pointed by scads of financial literature, the best plan for retail investors is to pick a diversified stock portfolio full of ETFs and keep investing at a regular cadence.
Below portfolios are simply minor deviations from Bogleheads and many Kiplinger ideas.
The philosophy is to pick high-quality, low expense ratio ETFs which you can put on auto-pilot and be unruffled, forever.
1. Super Simplified 1 Global Fund
100% stock, US + Ex-US, Developed + Emerging economies
| Symbol | Allocation | Description | 5-year Returns | Expenses |
| VT | 100% | Total World Stock Market ETF | 75% | 0.07% |
2. Super Simplified 1 US Fund
100% stock, mimics SP500 – essentially top 500 US-based companies by market capitalization. Obvious risk is diversity.
| Symbol | Allocation | Description | 5-year Total Returns | Expenses |
| VOO | 100% | SP500 | 144% | 0.03% |
3. Simplified 2-Fund Version
100% stock, US + Ex-US, Developed + Emerging economies
| Symbol | Allocation | Description | 5-year Returns | Expenses |
| VOO | 75% | SP500 | 144% | 0.03% |
| VXUS | 25% | Ex-US Investment | 20% | 0.07% |
4. Mixed 6-Fund Portfolio
100% stock, US-only, mix of SP500, Tech.
| Symbol | Allocation | Description | 5-year Returns | Expenses |
| VOO | 25% | SP500 | 144% | 0.03% |
| VGT | 35% | Information Technology | 163% | 0.10% |
| VXUS | 20% | Ex-US Investment | 38% | 0.07% |
| VB | 5% | US Small-cap | 64% | 0.05% |
| VO | 5% | US Mid-cap | 71% | 0.04% |
| SCHD | 10% | US High Dividend | 82% | 0.06% |
Although there are several studies advocating 100% stock portfolio, if you are closer to retirement OR still a fixed-income fan, you could use below variation –
Here’s all of these stock-only portfolios stacked together:
Please use this link to view detailed analysis in PortfolioAnalyzer.
5. Simplified 3-Fund Portfolio with US Bonds
Suitable for all.
| Symbol | Allocation | Description | 5-year Returns | Expenses |
| VOO | 55% | SP500 | 94% | 0.02% |
| VXUS | 20% | Ex-US Investment | 20% | 0.07% |
| BND | 25% | US High Dividend | -8% | 0.06% |
Tip: You can use BNDX to get international bond exposure.
Few FAQs to address obvious questions:
Why a few 100% stock portfolios without bonds, that’s bonkers?!
Our offbeat 100% stock allocation approach takes into account some of the recent, modern researches like below which heavily supports 100% stock portfolio through extremely detailed research.
Link to the original research paper:
https://www.netspar.nl/assets/uploads/1 … script.pdf
Extremely Detailed BoggleHeads Discussion:
https://www.bogleheads.org/forum/viewtopic.php?t=418189
Additionally, it assumes two things – one, you have 5+ years to retirement and two, you acknowledge the behavioral risk and commit to staying on course for the long term; in other words – you are not going to press below button at the first sign of stock market trouble.
Courtesy Krysten under Creative Commons
Where are the mutual funds?
Nowhere. And that’s intentional. Mutual Funds have higher expense ratio and less flexibility. The only exception would be Vanguard Admiral Funds like VSTAX (tracks Total US stock market). This JH Collins thread offers an elaborate reasoning on falling with love with Admiral Funds. If you are convinced, you can reduce VOO and VGT quota and go for 50-60% VSTAX instead.
Why no active investing?
Yes, I agree all this passive investing is sooo bland. The allure of finding that perfect, 10-15 bagger stock is just unbearable. My only advise would to keep your active investing escapades to what keeps you peacefully sleeping at night.
That’s it. Signing off with the customary Unruffled Life Pro Tip:
Eager to know how you can navigate the sea of distractions and disappointments & live a fulfilling time?
Joel Osteen shows you how to Rule Your Day & build your mental walls to never get ruffled by distractions and minor setbacks.
Disclaimer: The intent behind this post & any other material on this portal is to help our readers cultivate total wealth of health, money, time & social life (in that order) – essentially amplifying the joy and contentment in life. None of the content substitutes professional financial, tax, legal, health, home care or any other kind of advice. Please perform your own due diligence before acting on any of the ideas & material shared here.
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