Three-Fund Portfolio: The Lazy Strategy That Really Works

When you have a three-fund portfolio, your asset classes will typically contain the following: – U.S. Stocks – International Stocks – U.S. Bonds

What Is The  Three-Fund Portfolio?

1. Diversification

Advantages of the  Three-Fund Portfolio

2. Low cost of investing

3. Tax efficiency

4. Simple rebalancing     and management

Over at PortfolioCharts.com, they went back to 1970 and found the average return for a three-fund Portfolio right around 6%, after accounting for inflation.

Three-Fund Portfolio Performance

1. The 80/20

Three-Fund Portfolio Asset Allocation

2. The 60/40

3. The Equal Weight

2. Pick your financial institution

Building Your  Three-Fund Portfolio

1. Figure out your asset allocation

3. Matching funds of a three balanced portfolio

Here is a breakdown of the recommend funds

Build a three-fund portfolio with Vanguard – U.S. Stocks: Vanguard Total Stock Market Index Fund (VTSAX) – International Stocks: Vanguard Total International Index Fund (VTIAX) – Bonds: Vanguard Total Bond Market Index Fund (VBTLX)

I think for all new investors, it’s the best place to start with Three-Fund Portfolio. It’s easy, simple, and completely effective.

Final Thoughts

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