The “Three Fund” Portfolio Part 3 – Bonds

Having examined stock selection in Part 1 and Part 2, let’s turn our attention to bonds. The leading Total Bond Market ETFs are Vanguard’s BND and iShares’ AGG. There’s little room to optimize here as it really doesn’t matter which one you choose. When I run these ETFs in balanced portfolios using VTI/VEU and DGRO/DNL, … Read more The “Three Fund” Portfolio Part 3 – Bonds

The “Three Fund” Portfolio Part 2 – Foreign Stocks

In Part 1, I looked at a better domestic solution than VTI. Now, I will examine the foreign stocks piece for a better alternative to VEU. (Some use VXUS instead of VEU. Their returns are virtually identical but VXUS has a slightly higher three-year tax cost ratio per Morningstar, so I will use VEU in … Read more The “Three Fund” Portfolio Part 2 – Foreign Stocks

The “Three Fund” Portfolio Part 1 – Domestic Stocks

Introduction Recently, I reviewed model “risk-based portfolios” (i.e. conservative, moderate, aggressive) from First Trust and Blackrock. These companies promote their portfolios to investors and financial advisors under the guise of “modern portfolio theory” diversification. Typically, they recommend between 10-16 in-house ETFs. These investment shops update their portfolios quarterly to overweight the hottest sectors or factors … Read more The “Three Fund” Portfolio Part 1 – Domestic Stocks