Time To Ditch The 3 Fund Portfolio?

[@OnCashFlow]

I started with a 3 fund portfolio in 2013 and switched to 2 funds in 2020 (when stocks fell sharply and bonds increased). I sold all my bonds and bought the discounted stocks. Ever since then I have been 100% stocks with about 80% U.S. and 20% International. Well here we are nearly 4 years later and I'm thinking of going back to 3 funds because the dynamics of my life have changed.

[@thedoor5442]

Time to back down some.

[@michaellynch450]

Just a heads up, at 0:34 you put VGTSX as a Schwab Int'l fund but that is a Vanguard mutual fund. The real one should be SWISX 😄

[@EfLuis]

I honestly think what’s messing with peoples mindset is these finance KZbinrs that stock pick. They only see the wins not the loses or they just buy the magnificent 7 and thinking they are a genius. I found the Jake Bogel 3 fund portfolio and I’m happy with average returns. Btw I opened a custodial account for my little sister and out her in the three fund portfolio and yes that’s including BND.

[@mtombak]

Investing since 98' have seen it all in the market. The best way to invest is low cost total us and ex us markets and stay fully invested no matter what happens in the market.

[@JarradMorrow]

Thanks for sharing that wisdom 👍🏻

[@jimj.6412]

yep, trying to time or guess the market will get a person busted and stressed out. I put mine in the s&p and forget it, in the long run it will make some money. About 15 % I invest in individual companies , hoping to get lucky and even those are long term holds.

[@TaiwoOmotosho-m9v]

Thanks for sharing this great wisdom. I have a Defined benefit pension scheme but also investing in SIPP where I have S & P500 UCITS ETF and FTSE All Global Capped Index fund. Considering adding US Equity Index Fund Accumulation which is equivalent of VTI. The platform allows one to invest them in both SIPP account and Stocks and Shares ISA . No intentions of adding Bonds since all employers invest workers workplace pension contributions in Bonds and Gilts etc which deliver minimally and Active Fund managers fees are high .

[@HollywoodEDC]

I hold VOO, QQQ, VNQ, SCHD, SCHY, and BND. It basically corners every sector and exposes me to the best of everything.

[@GmanSJ]

Makes sense. Do you use Vanguard or Schwab? Any pro’s or con’s to having an account at one brokerage and funds from another in your account from a cost standpoint?

[@davidbrooks8809]

VOO covers everything😊

[@eddiealfano]

Great video! I do question the international and bond allocations though. Namely, i don't see the point in having ANY bonds until a few years before retirement, at which point loading up on cash/bonds until you have a few years worth of expenses saved up seems to make sense. As for Internstional, has there EVER been a 30-year period where they've outperformed? I kbow there's been 5, 10, and maybe even 20 year periods. But for the average investing timeline of 30 years-plus, can you find a period where international wasn't a drag on a portfolio?

[@jgray690]

I agree. And I think in some of his past videos he has disclosed he didn't have any bonds yet for the same reason. IF you have a 15+ year horizon, it doesn't seem like it make sense.

[@k5sss]

Different asset classes tend to move in different directions at different times, which is the whole point of diversification. US Large Caps have done well in the last 10 years, but look back at how they performed in 2000-2010 vs other classes. Those of us who lived through that learned from it.

[@Russyda1]

Remove the bonds untill your older and this method is the best hands down ❤

[@ChillBrah_]

Great content as usual. Stay the course fellas…DCAing into retirement

[@JarradMorrow]

Thanks! Will do!

[@BadPhD777]

I'm retiring in April. Last year I went from about 15 investments to three. Gotta keep things simple because my brain isn't going to get better with age and my wife needs it simple too! Auto-pilot on - enjoy retirement!

[@mj1961christian]

I went from 25 funds to 4! Much simpler. My advisor had me in 25 funds. By by advisor!

[@BadPhD777]

@@mj1961christian Right on! Keep it simple and diverse!

[@geoffgordon9569]

K.I.S.S = Keep It Simple Stupid.

[@NoNaMeChugaister]

What a great video, love how you deliver the message. Thank you!

[@JarradMorrow]

Thanks for the kind words!

[@RayRiv73]

In my fidelity roth im investing 75/25 in FXAIX & FTIHX...$500 a month set it and forget it.

[@grigorirasputin425]

Limits are higher than $6,000 since 2023

[@RayRiv73]

@@grigorirasputin425 yes 8000 for me I'm 50

[@RayRiv73]

@grigorirasputin425 yes $8000 for me

[@LegendaryWaz]

What do you think about Robin hood IRA with 1 percent match?

[@iArcanex]

Love the content! On a side note, I've noticed this for a while from video to video, but I can't keep myself from calling it out this time. Has anyone noticed the transitions used by Jarrad have really fast/gradient flickering, like at 4:58? It could be a personal device (or certain GPU accel) thing, but they are near-epileptic IMO 😅

[@JarradMorrow]

Appreciate the feedback. I just rewinded that point of the video 20 times and I didn't notice anything 😂. I'll check it out again the next time I'm tripping on mushrooms to see if I notice something.

[@tannercadarette6648]

lol I just got into fidelity haven’t started any investing yet but all I see is acronyms and letters. Watched your 5 Fidelity fund video will probably do the ones listed on there and avoid overlap

[@Andarius]

I keep seeing the "new 3 fund" videos with SCHD and VGT/VUG/QQQ without international holdings. I watch them sometimes out of morbid curiosity like I do flat earth videos.

[@JarradMorrow]

I get it from a KZbin clickability perspective because it seems like a novel topic. But unfortunately the whole case for why they say it's a great way to invest going forward falls apart because it's based on past performance. I like your "flat earth" analogy 😂😂

[@Milwaukee307]

I thought the Earth was flat?

[@korndawggy1801]

What's your opinion about all the different videos where they say alot of the top US companies are already connected with international funds anyways? I've seen quite a few different ones saying that.

[@Brendelson]

International is not necessary. Most S&P 500 companies make earnings internationally. Professor G’s 3 fund portfolio is actually a really great idea. I started one last January and it’s up 20%. Which is great returns. If you’re young, def need tech in your portfolio. There’s also no need for bonds. Just have a dividend ETF.

[@Brendelson]

@joshsantos9965 his 3 fund portfolio is trash?

[@JesseniaBarrutia]

You mentioned to rebalance once per year. Can you please explain what does rebalancing means? And how you do it? Thank you!

[@FJX716]

I opened a ROTH and went with a growth ETF, total US ETF, high yield dividend ETF and real estate ETF. I already have Bond exposure in my 401k so I thought it’d be a waste. So far I’m happy with the results.

[@joy2come119]

Same exact thing with me I have the exact portfolio as you and thought that since I have 10 percent in bonds in my 401k that I wouldn't add them to my Roth

[@jameswilsonstyle]

Hi! I'm new here and am loving your videos! Very helpful information. I was curious why you aren't holding bonds in your IRA? Thanks!

[@k5sss]

You want max growth in your tax-advantaged accounts, which you draw from last. That means bonds go in taxable accounts even though that is counter-intuitive from a tax standpoint.

[@HenryLopez-uw6hy]

Sticking to a plan is so hard for me. I started out with the 3 fund portfolio then switched to the “new” 3 fund portfolio. Now I’m doing just the 2 fund portfolio (no bonds). I come to KZbin to watch videos to learn but then get distracted by new investing strategies. I need to stop doing this.

[@thedoor5442]

Keep some small money to gamble with, that's what I do.

[@sent7127]

I am contemplating the new 3 fund portfolio. How did it go for you?

[@HenryLopez-uw6hy]

@@sent7127 I didn’t stick with it long enough. The key thing no matter what strategy you choose, is to just stick it out for the long term.

[@michaelandujar8109]

Thank you another good video

[@JarradMorrow]

No problem! Thank you for the continued support!

[@TheDistrict2380]

Thanks! Love your videos

[@JarradMorrow]

Thanks for watching!

[@shaereub4450]

Why not 50/50 VT/BNDW? Or 75/25 90/10 VT/BNDW? I have most if my investments in Betterment, which charges 0.25% bit makes up for it with tax loss harvesting. My new HSA im investing with Fedality.

[@JarradMorrow]

Those portfolios are close enough to a 3 fund portfolio so that works 👍🏻

[@shaereub4450]

​@@JarradMorrow just noticed the 3 fund portfolio includes BND or BNDW to prevent having internal bonds.

[@johnny_blades]

Even Buffet said he will put his wife in a "Two Fund Portfolio" when he dies....90% equity and 10% bond. I'm not invested internationally right now. I've replaced that with a Nasdaq fund (QQQM) for a little extra exposure in tech, for the time being. Thanks for the vids!

[@grigorirasputin425]

90% S&P 500*

[@carlosesparza2459]

I’m doing the same!

[@es330td]

You cannot use Warren Buffet as a guide for your own life. His wife is going to inherit more money than is in some of the biggest mutual funds out there. Even if there was a great actively managed fund worth investing in they could not handle an influx of a billion dollars, much less multiple billion dollars. His money has to go into the S&P 500 because it is the only fund that can take that kind of volume.

[@davecristdavecrist]

The difference, though, is the amount of that 90/10 investment. It’s easy to live off even 1/2% yield when 1/2% is 50 million dollars a year.

[@nonamuss9991]

But you can see why folks debate the international exposure. Pre-1989 it seemed to make sense. Since then it looks to have bettered US find only about 20% of the time.

[@JarradMorrow]

Yes, I completely understand why people would want to avoid international which is why I specifically said that in the video. But that doesn't change the fact that we have no idea how the next 30 years are going to play out. The whole point of a 3 fund portfolio is to say "hey I have no idea what's going to happen in the future so I'm just going to place my chips on everything and be done with it". If someone still wants to avoid international going forward then I have no issue with that as long as they understand what they're doing and can handle whatever outcome they get.

[@ramonrodriguez-montalban4308]

Excelent content. What Vanguard bond fund is your choice for the three fund portfolio?

[@fattie2550]

Single fund portfolio is king. VOO or VTI.

[@GadgetHark]

So, what percentage of my portfolio should be invested in international stocks?

[@shaereub4450]

What is your opinion on the 4 fund portfolio? adding Total International bond etf/index fund?

[@JarradMorrow]

I looked into the validity of adding a total international bond fund a few years ago and based on all the studies and research I went through it didn't add enough benefit to warrant including it in a diversified portfolio. It definitely made the portfolio more diversified and improved risk adjusted returns, but the benefit was so insignificantly small that it might not be worth it when you account for increased complexity (3 funds vs. 4 funds). I'm usually really good about documenting my sources so I can cite them when questions like this come up, but unfortunately I didn't do it for this one (go figure 😂🤦🏻‍♂️). I know this sounds like one of those "trust me bro" statements, but I'm 99.999% sure this is what the studies/research said even though I can't cough up the data to back up my statement.

[@Steve_SEC]

What do you think of VMFXX instead of BND?

[@MikHail-j1u]

I was expecting a comparison of the 3 vs 2 fund portfolio.

[@natandotan9950]

Great video, what's your allocation between the US and the international markets?

[@glockman99]

Very interesting video.

[@JarradMorrow]

👍🏻

[@Jary3166]

Thank you for this video, it's a really great primer that covers the 3 fund portfolio. Going a bit beyond the 3-fund portfolio, I am seeing many funds of funds (529 and target retirement at Vanguard/Fidelity) that have added International Bonds Index Funds and sometimes TIPS, in addition to the 3-fund portfolio. I am curious to hear if the hear 3-fund portfolio could become a 4-fund portfolio with international bonds (similar to the international stock held in the 3-fund) for increased diversification. Do you think the extra complication of the international bond fund adds diversification, and if yes, is it worth the added complexity of holding one more fund?

[@martinguldnerAutisticSwanGuru]

Inherited from my brother's estate in 2020 the Franklin Income Fund is my bond equivalent since 1948 always yielded more than the 10 year US treasury.

[@RealBlueLady]

It would be great if you did a video on what current retirees should be invested in. Thank you, a Retiree.

[@glasshalffull2930]

Are you a current retiree that has a pension, a couple hundred thousand in cash and over $3 M in your 401K or do you have no pension and $10K in cash and $300K in your 401K? Everybody is too different. Also, there are the tax implications. As Jerrod said, a flat fee analysis is what you need.

[@thedoor5442]

VTI or VOO and CD's percentage of split at your risk comfort level.

[@JyotiRyan21]

So what's next? After maxed 401k, HSA, and ROTH IRA, plus a couple of real estate investments already in the mix. Let's say I got an extra nice sum sitting in a high yield savings account, how best to invest it?

[@JasonHarlow-g6m]

Jarrad, I have been investing with my work portfolio 401k fidelity and been investing into a target fund essentially for 15 years 😐. I’m almost 50 and looking at selling it all and going with your 3 fund investment. But through my work 401 I’m actually able to buy US treasury bonds. Would it make sense to take 20% and buy the higher yielding 6 month bonds and continue to reinvest those as they mature as opposed to a bond fund per se? Thank you for these tips and videos they are a huge help for average joes who need investing simplified

[@G-man25]

What is the rebalance once a year point, I still have hard time to understand? Do you move around your slices of investment pie?

[@aaront936]

You prune your flowers to water your weeds.

[@joshlawless7496]

Right now I’m looking to invest in SCHG,SWTSX and SWISX. I do like SWPPX but I’m thinking those 3 funds together might be better. SCHD is a good one too. I’m looking for thoughts and suggestions? Thank you.

[@DanielSuarez-zn8iw]

I like/have SCHG (Large growth), SCHB (Broad U.S. Market), and SCHD (Dividend yield).. I am looking to add some SCHF for International diversification

[@QuadTap]

It seems like we've crossed an event horizon with the national debt and that bonds are mathematically programmed to be repaid in lower valued Fiat money. I'm finding it hard to even stomach a 10% allocation to them.

[@JarradMorrow]

I get it. They're not for everyone. If you can handle the short term fluctuations and stay invested then it might not make sense for you to hold them

[@Disinfective_Vibes]

What do you think of equal weight etfs like RSP, EQAL, QQQE?

[@avs-forum]

A good dividend index fund is an excellent bond substitute if you are not nearing retirement. While they are not as "stable" as bonds, they can be pretty darn close while having more potential to bring in more gains during your earning years. Of course, once you are close to retirement, this strategy might not make the best sense.

[@davidbrooks8809]

True..you can always add more pieces to your 3 fund.. I have Berkshire Hathaway And Amazon..😊😅

[@ianscianablo8507]

@@davidbrooks8809 Hi. What % do you suggest for berkshire?

[@ManDownSouth]

But, But, But - Jarrad - My Neighbors's, Cousin's, Boyfriend swears that HIS way is the best way to Make $$. Human Nature and our tendencies are a powerful force that drives Greed and Fear. Appreciate you trying to re-center folks with your videos.

[@JarradMorrow]

😂👍🏻

[@alex182618]

Before watching this video: buying government bonds during the war 1939-1945 was advertised as patriotic things. After the war, it has become a “diversified and balanced portfolio with reduced volatility.” After watching video: Most people do need financial advisors. Financial advisors keep nervous people invested during “tough” times and “good” times.

[@IBoughtItMyself]

Surprised this didn't show how an example portfolio would have worked 10-20-30 years ago.

[@shaereub4450]

Im planning on keeping HSA my max out-of-pocket in FDRXX and/or other stable money market funds. The ret will be for retirement, so I'm thinking 36% VTI, 18% VEA, 6% VWO, 15% BND, 5% BNDW, 10% REET, 10% GLDM. (60% VT, 20% BNDW, 10% REET, 10% GLDM)

[@TheAzmountaineer]

It seems like both International and bonds haven't done well in a while. I had a little international in my 401K for many years and it never did anything exciting. Bonds may be looking up a little recently, but returns on funds like BND over many years don't exactly inspire confidence. Maybe specific bonds would work better, but a bond fund seems to lose some the best benefits of owning bonds. As a recent retiree, I definitely like the idea of simplification, but I'm just not seeing it here. I guess I'm missing something.

[@cryptokeper]

I have to disagree with you on your perspective here. While fund overlap is an important consideration, SCHD and VOO are trying to accomplish two different things. SCHD has a higher dividend target while VOO is a growth fund. Maybe you want growth and dividend income so I don’t see how that is a problem once you are at a certain age. Disclaimer: I do not hold SCHD in my portfolio but I do hold FXAIX (in my 401k) which tracks the SP500.

[@davidbrooks8809]

Wait what??..lmao..ok😂

[@hermitcrypto2787]

Your chart had an error.. SWISX

[@fd5449]

Another fine video....

[@JarradMorrow]

Thanks!

[@gottagowithjoe1]

Can I take my 401k and IRA from my finacial advisor and put in a 3 fund portfolio?

[@davidbrooks8809]

You can ask but probably not it's set up their way

[@hotballz72]

If your 401k is at your place of employment.....no. If ur no longer with the company for the 401k....u can roll it over to a brokerage of your liking and control it yourself. Your IRA can be and should be controlled under you if you wanna do the 3 fund portfolio.

[@gottagowithjoe1]

@@hotballz72 it is with my financial advisor. I am self employed.

[@uf1978]

One fund here! Retiring in 3 years and all just put in the 2030 fund!

[@josepheridu3322]

Glad you called out Cathie Woods. I don't get why people hype her so much, she is a terrible financial manager and it did hurt many families.

[@JarradMorrow]

I've been saying this for years. Got a lot of push back when her fund was performing well...now those people are nowhere to be found 😂.

[@mashort07]

Serious question-I’m 38, I have most of my investments in my (and my wife’s) Roth IRA, I have an emergency fund so obviously I have no intention or reason to touch my investments until I’m at or close to retirement age. So why should I care about volatility enough to invest in anything beyond the S&P500 at this stage of my life? I understand a 2 or 3 fund portfolio will make more sense as I get closer to tapping into those funds, but right now and for the foreseeable future my only goal is maximum growth. Can you (or anyone) provide a little feedback? Is my line of thinking correct or am I missing something? Thank you!

[@nutria12247]

I agree with you. No need for bonds right now in your retirement accounts...as long as you don't panic sell in down markets.

[@zmack1830]

Jarrad.......A Seneca of our time !!

[@JarradMorrow]

I appreciate it, but I don't deserve a title like that.

[@zmack1830]

@@JarradMorrow Though you do not deserve that title, you can take it with a smile as you mostly apply many of his principles !!

[@tylersucher8653]

I got rid of International based off of research, watching Warren buffet and Jack Bogles opinions on the matter. So many variables, different currencies, governments, the way those economies are ran, wars, etc. so I’m just doing SCHD, SCHG, SPLG in my Roth IRA. My retirement fund havs S&P 500 fund, growth fund, mid cap and small cap. International funds have like 4 to maybe 5% growth since inception so I’ll pass lol.

[@tylersucher8653]

@joshsantos9965 yup and historically it still crushes international in the long run

[@davidbrooks8809]

SCHG and SPLG.. super overlap the only difference is Tesla

[@GentleWhispersHaven]

What is better: S&P 500 or Total Stock Market Index Fund?

[@nutria12247]

For a 3 fund portfolio, I would lean toward the Total Stock Market Fund since it offers a little more diversification.

[@russellhunter8460]

Voo better returns and better dividends

[@edwardloizides5415]

Never ever invested in an international fund . I said that in the 1990s and I’m saying it now . First off like you were spot on with a dividend ETF , your international fund is still stocks . Additionally American companies are global . There is absolutely no reason to have this fund type as a major fund in anyone’s portfolio. Waste of time and money.

[@grigorirasputin425]

Jarrad, I am sorry man but that type gf belongs to the streets😂😂😂

[@JarradMorrow]

What are you saying? Should I kick my current gf to the streets?!?! She said she loves me and promised this time would be different!!! 😂

[@grigorirasputin425]

@@JarradMorrow i am sure she also added that “prior promiscuity is not an indication of future divorce”

[@davidbrooks8809]

😂😅😊

[@TheJmw116]

3 funds: VOO VXUS SPAXX instead of bonds etf.. Pays 5%

[@joy2come119]

I thought about using spaxx too over bnd being as if its already one of my core accounts. The yields are pretty much the same smh.

[@johnnycircus7463]

I’ve parked on M1, with a two-fund of VT (95%) and BNDW (5%) for over a year, and I’ve been pleased. What say you, @JarraddMorrow?

[@JarradMorrow]

That's close enough to the 3 fund portfolio so you get my stamp of approval

[@davidbrooks8809]

Love it!!

[@patricklambert6020]

This is awesome. I've been waiting for you to enlighten us regarding the recent influx of finance youtubers suggesting the dividend ETF/VOO/growth portfolios. I was on the SCHD train since it outperformed the S&P 500 that one time. I realized I was just chasing after performance rather than staying the course with 3 fund. Fortunately, SCHD did go up and I sold out at a profit to get back in on VTI but unfortunately I missed out on the greater gains from VOO/VTI. Never again.

[@JarradMorrow]

Luckily someone brought these goofy portfolios to my attention. I don't pay attention to 99% of creators in this space so I'm pretty clueless about it all unless someone tells me about it.

[@RafalTraveler]

Stock and girlfriend is nothing alike. If that's your reasoning for stayuing "All US" it is too weak to hold IMO.

[@fins5150]

Topic for yah-... As aging Gen X er's inherit parents hard work, how to you consolidate many a new opportunities? Person starts late in retirement game?, Can the opportunity pay off by x years? 😏 Enjoy the channel Nice wit on the girlfriend at the end

[@roosenlodewijkwiggers4594]

If your only investment is the stock market it makes sense to have bonds as a base. But you invest in the stock market for chances on return, not because you demand a fixed return, outside the stock market there are enough possibilities for that and your argument that it is not stocks is not true, as they are traded. Also if you look at the more recent data you see that bonds moved down with the stock market, as such not proving to be the hedge against bear markets. I am nearing retirement and bonds will never be part of my portfolio, i choose to invest in CD or direct lending with real estate collateral, easy 6-7% fixed. My stock portfolio will be 2 fund, one for growth other income (so i don’t have to sell stock to create income)

[@aaront936]

Bond funds are trash. All the downside none of the up sode of bonds.

[@remy-k5f]

The probability of continuing to do it goes down. False. Not how that works.

[@thefloristntheflower]

@jarradmarrow it’s 2:25 AM n I’m up watching you video. I’m not sure I’m investing the correct way in my Roth IRA I currently hold SCHD VXUS JEPQ and QQMG your thoughts please as you know I can only max out at $7,000

[@JarradMorrow]

I guess the first thing I'd need to know is how old are you, what are your investing goals, when are you going to need the money, why did you choose each of those funds individually, and how you expect those funds to work together to help you achieve your investing goal. I can't really give you my thoughts unless I have all of that info because for my situation that portfolio construction would make no sense...but for someone else it might make sense.

[@thefloristntheflower]

Thanks so much for taking the time to respond. I’m 35 and my goal is to have money in my Roth IRA my goal is to retire between 48-52

[@CalmerThanYouAre1]

It’s an option… definitely not the best option. But good luck!

[@chriscallaham3629]

You said something blatantly wrong, and it’s really bothering me. In what since would you be decreasing diversification or increasing risk by having overlap in your funds? This makes no logical sense. I know people say to avoid this for complication sake, but this is the first I’ve heard anyone say anything along these lines, and it’s just objectively wrong. Could you expand on what you mean? I guess maybe I’m missing something…

[@JarradMorrow]

It actually makes complete logical sense. Fund overlap is when you hold at least two funds that invest in the same stocks. For simplicity sake lets say someone holds VTI (total u.s. stock fund roughly 3,600 stocks) and VOO (S&P 500 fund roughly 500 stocks) at the same time. By holding both those funds at the same time, more of your money is concentrated in those 500 stocks held within both funds. Putting more money into a few stocks does reduce diversification and increase risk.

[@edwardloizides5415]

Why why why would you ever by an internationally fund . It was wrong in the 1990s and wrong today. Most foreign countries are laggards as are their companies. Invest in US companies that are Global ( which is virtually every large US company) . Stop with the international

[@JarradMorrow]

Investing in international was correct from '75 to '82, '86 to '90, and '04 to '10...the future is unknown. Recency Bias: "a type of cognitive bias that causes us to assume that future events will resemble recent experiences. In other words, it causes us to think that, because certain events happened recently, they are likely to happen again soon."

[@remy-k5f]

couple of things. "even the professionals under perform", is that why they drive Mercedes? "no one knows where the market is going" False. Easily proven to be a false statement.

[@punisher6659]

Thanks for your content.

[@JarradMorrow]

I appreciate your support by watching the videos!