Effective. Fidelity has published lots of portfolio models, including 5 using index funds from 20/80 to 80/20. I can’t believe someone has documented all these model portfolios over the years. Adding more bonds to an income stream that is already essentially 50-90% bonds already is just crazy IMHO. Notify me of followup comments via e-mail. I’d like a simple, but, somewhat aggressive similar taxable (3-4 ETFS). The one universal tenant of investing is “risk/return is related”, trying to bet big on small slices of the market to avoid this reality goes against every prudent investing principle you can think of. I don’t see that changing in the near future due to family reasons. This banter back and forth has been very interesting to read (as has the article). As Merton Miller said, “diversification is your buddy.”. Comment below! Want all the stocks, not just US ones? I think all of those portfolios look great Eric. Yes, hot hand is based on momentum. 10% Vanguard Extended Market Index Fund Lazy portfolios are designed to perform well in most market conditions. In reality, this is just a fancied-up three fund portfolio. On the other hand, it is assumed that every investor should hold both domestic and international stocks. But I'm sure it has been less volatile. All you need is one successful way to invest. If I would do it again (which I won’t), it would be in an IRA account. He is a true believer in the small and value factors of Fama and French, and carries the idea behind a slice and dice portfolio to the extreme. The reality is that there is a large body of knowledge demonstrating the importance of dividends over long measurement periods. hide. Thank you so much, my fellow Bogleheads! Bogle suggested the “majesty of simplicity.” Winner: DIY Bogleheads Portfolio Estate Tax. I agree that a portfolio of 100% stocks is likely, but not guaranteed, to outperform a portfolio of bonds and/or SPIAs over a long period of time. Thanks for the reassurance. I am only 2 years into retirement, but plan to stick with my 20 dividend payers for my income. I consider The 7/12 Portfolio to work well for the “passive” portion of my portfolio. Three months ago I opened an account with TDA. An inflation indexed annuity bought at age 70 pays over 6%. I disagree that using an income stock approach is “like guaranteed income.” It’s not. No need to get more complex than that. It doesn’t appear to me that you’re any better at picking stocks than all the professional mutual fund managers out there who can’t keep up with an appropriate index fund. 10% Vanguard Emerging Markets Index Fund This is what normally stresses me out, wondering if I’m a naive idiot drunk on past success because the vast majority of smart people I respect advocate for something that looks very very different. Two final quick comments in closing. Clever, huh. Your link shows what the G is but it doesn’t share which index the S follows. Your email address will not be published. 17.5% Vanguard Total Stock Market Index Fund I would argue your income approach to investing, rather than a more theoretically sound total return approach, lead you to work longer than you otherwise had to and now to spend less than you otherwise safely could. I think what you’re doing is reasonable and, with investing, reasonable is good enough. It is a great marketing strategy for those selling what he is selling but it is not empirically correct or backed by a wide range of research. Value strategies performed no better than their indexes on a risk adjusted basis. Did great last year, but, as you pointed out, its heavy with big caps, and from what I gather, small caps crushed it last year. Another variation is to use Total Stock Market instead of Growth Index and Small Cap Index Fund instead of Small Growth Index. They've learned the importance of buy and hold, the importance of keeping costs low, and the importance of using passive investments over active ones. One guy does the roth with the beleif that he will be in a higher tax bracket when he retires than now, because new higher tax brackets will be made. The very good news is that this income is less than 2% withdraw from my total portfolio, so even if I did need to pull some money from the growth side to shore up a dividend payer or two (which hasn’t happened so far) it would not be a problem. 10% Short Term Government Fixed Income 10% IShares Lehman Aggregate Bond Fund (AGG) Final Comments about Bogleheads Investment Philosophy. Any insights on building a long term/buy-and-hold taxable account portfolio welcomed. 40% Vanguard Short (or intermediate) Term Bond Index Fund. 9% Vanguard Small Cap Value Index Fund I already have and max out a ROTH - that setup is VTI/VXUS/BND/UHT. When you suggest regularly rebalancing your portfolio, how often do you recommend doing this? My wife and I are two physicians both starting out after residency. This one is 60% stock but there are 9 more ranging from 10% stocks to 100% stock. Investing Specialists Morningstar's Top Fund Picks for Taxable Portfolios Traditional mutual funds and ETFs for tax-efficient exposure to domestic and international stocks as well as bonds. I currently have a 401 (k) maxed out, as well as a maxed-out Roth IRA on the side. Darrell Armuth at Sensible Portfolios, who used to advertise with me, runs a financial advisory firm that uses DFA funds. I say aggressive because I’m very late to the investing “game”. In this low yield bond environment many are finding out (I would suspect) that they just can’t get the income they need from the bond side of the equation, so they are forced to sell their equity side investments. There is even a one-stop-shop mutual fund for 84 basis points that's been around since 1982 with 15-year average returns of a little over 6%. share . I’m a perfectionist and stress myself about being a perfect investor and need to take a chill pill. Beware of P2P (Lending Club). In fact, I'm positive mine isn't the very best one. is unnecessary to produce acceptable long-term returns, so why do it? For a cost of just 14 basis points, the 2030 Fund uses the same 4 funds that the Life Strategy funds use (in a 69/31 allocation) but gradually makes the asset allocation less aggressive as the years go by. Most important is having a portfolio you can stick with. Obviously, you could mix this in with some international stock funds and bond funds until you get to something you like. The Bogleheads 3-fund portfolio I wrote about in 2014 is an example of a lazy portfolio. Where do you prefer to research when building a portfolio for a taxable account? 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