Why The 3 Fund Portfolio Is King

[@JarradMorrow]

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[@carieyounginsurance]

Love Fundrise and M1finance! Has helped me a lot the last year and a half

[@jnlin85]

Hi Jarrad, just starting out with investing... Can you buy vanguard index funds and vanguard ETFs through M1 Finance? If so, are there any additional fees/commissions/etc if I bought vanguard index funds or ETFs via M1 as compared to directly through a Vanguard account? Or what about through other brokers like Fidelity or TD Ameritrade? Thanks for your videos!

[@JarradMorrow]

@@jnlin85 You van buy Vanguard ETFs on M1 Finance, but not their index funds. Their index funds are only available through the Vanguard platform. The good news is that there's usually an ETF version of all their index funds so you're essentially investing in the same thing. There aren't any additional fees through M1 Finance. There aren't additional fees through Fidelity or TD Ameritrade either. I personally prefer the M1 Finance user interface and features over the others, but if you prefer any of the other platforms then go with those ones.

[@jnlin85]

@@JarradMorrow Thanks for your response! So to compare the cost of Vanguard ETF vs Vanguard Index Funds I would just need to look at their expense ratios and nothing else right? Was just trying to see which one was least expensive...Thanks!

[@JarradMorrow]

Correct. The ETFs will usually be a little cheaper. Not always, but most of the time.

[@hilzabub]

My wife and I were 100% in stocks in the middle of that drop in 2007. It was painful, but we kept adding new money all the way through. A few years later we looked like geniuses. So I think I can handle the swings.

[@Tyler-rc1wu]

This stock heavy strategy can expose the investor to undue risk. Diversify ppl.

[@letsbefreeletsbefree7183]

@@Tyler-rc1wu I think it also depends on ones age when I was 20 and maybe only had 10k in my name then I was more Willing to go 100 percent stocks than now 10 years later when I have more money

[@dlg5485]

@@Tyler-rc1wu It's called risk tolerance and everyone's is different. What is right for you won't work for everyone. Be careful not to project your personal values onto others.

[@Meh-hr7gq]

How you doing today?

[@TFJ2024]

I only own 7 individual stocks

[@kevinmendoza4402]

I think this may be your most important video. I watch it a few times a month to help keep me focused on the 3-fund strategy. So easy and so effective. 1. VTI 2. VXUS 3. BND all the way! Thank you again Jarrad!

[@JarradMorrow]

Glad it was helpful!

[@garymcfadden2797]

Best financial advise ever this video and trust me at 70 years I have tried plenty of investment strategies. Besides Jarrad, the only other professional you need to reach total financial independence is a good accountant/registered agent as Bob Brinker used to say. Thanks for keeping us grounded Jarrad!

[@lulatorres8694]

Which broker do you use?

[@Gary65437]

@@garymcfadden2797 My father used to listen to Bob Brinker on the radio from back in 1998 when he would buy MSFT and QQQ at the $25 low in 3/2003 and the same low price in Oct 2008. 100K in QQQ was worth $1,600,000 at the recent $408 peak. He only buys and holds as he hates paying capital gains.

[@illing711]

d

[@TheBassicBassist]

This is one of the most important investing videos ever. Your closing thoughts, along with the varying strategy options, while maintaining the singular strategy, were phenomenal. Thank you for summing it up so well

[@theowenssailingdiary5239]

Did you fall asleep in 2022?

[@TheBassicBassist]

​@@theowenssailingdiary5239sure. Whatever that means, sure I did, yeah

[@loveofyahweh9660]

Watching this & I feel like my eyes are now opened. I am starting to really understand. You’re a great teacher! Thank you for sharing your knowledge & not gate keeping.

[@montanaarmwrestling8453]

This video made me subscribe. Specifically the part where you discussed the risk and reward of the stocks vs bonds. I'm new to investing in a Roth IRA and this is very helpful. Thank you!

[@kaustshroff381]

Where have you been all my life? Like why do we make investing this mythical thing that normal ppl can't understand? Never change. Stay this clear and concise. Subscribed!

[@ZeeNakamoto]

Just changed my M1 Finance pie to VTI, VXUS and BND. Thanks so much for this

[@JarradMorrow]

Glad it helped! Let me know if you have any questions!

[@deveshmaheshwari6598]

Very helpful. Based out of india , I plan my daughter's investment who is in USA courtesy your inputs

[@tamiltholaikatchi]

What was the percentage of allocation in M1?

[@amardeepchawla4052]

Loved the clarity in your content. My fundamentals are now in place. Thanks for doing this.

[@JarradMorrow]

Glad it helped!

[@LietSayri]

Subscribed. You have a fantastic straightforward style of explaining how investing works and why (and the tables were really helpful to compare also). Thank you for the video!

[@JarradMorrow]

Awesome, thank you!

[@kathyokinaga9888]

Yes, I love the tables

[@jaimekatz6645]

Great video! I've been giving myself a crash-course in investing the past 3 weeks. The one thing I've heard that you didn't mention was that besides not panicking when the market is low, this may also be a great time to buy more, as you get stcoks, ETFs, etc. as a lower price.

[@JarradMorrow]

Good point!

[@webnplay]

precisely, when the market crashes, do not think oh nooo my investment went down 30%, but think, yes! now I can buy them for 30% less then they are worth. The longer you are in the market the bigger the crashes you can mentally handle. Also knowing rebouncing can take up to 5 years is something that might help against a mental breakdown :D

[@milostea]

at 11:08. Thanks for showing the drawdowns for each allocation. People react very differently when the "rubber meets the road" in a stock market downturn. One may say "I can handle a 30% drawdown" but in reality a much lower value is when they "throw in the towel". Great Info!

[@adkforester5428]

I like how that worst year for 100% bonds was down 2.66% until 2022 down 10+% YTD. Just goes to show you need a margin of safety built into all strategies.

[@soniaevans-ty7gz]

I’d like to understand what you’re saying but I don’t. Saying bonds down a good thing. Hope you’ll answer

[@JaredAllegretta]

Dude, you said wait for it and didn't make me wait AT ALL. Now I have to go wait for something - I was so ready.

[@JarradMorrow]

😂

[@tedjamesart]

Good points! The 52% drawdown reminds me of how it has been recently, October 2022, with the market decline

[@JarradMorrow]

It's so important to understand the drawdown potential for each portfolio which I've never seen someone here on KZbin mention.

[@tedjamesart]

@@JarradMorrow good point 😊. On a similar note, it’s been stressful watching NVDA decline month-to-month, yet I’m still adding to my position, since I believe NVDA is the future of many things (or, at least, something that won’t go away).

[@Dino-sx9ct]

@@JarradMorrow It's the most important point. It's easy to bash financial advisors 'because they take a piece of my money', but truth be told, most individual investors don't have the discipline to hold on when their money is cut in half. A good advisor can set these expectations and coach you through it.

[@JarradMorrow]

It's easy to bash financial advisors who charge an ongoing % based fee because they deserve to be based. Those types of advisors are most likely screwing over investors because their incentives aren't aligned with what's best for the investor. The better type of advisor are the ones who are true fiduciaries that charge by the hour.

[@maxview99]

I'm currently 100% VTI in my Roth. Living dangerously

[@JarradMorrow]

😂 I like it!

[@jessewallace12able]

Same

[@geoffgordon9569]

Go bold or go home.

[@OMGitsJesusHChrist]

Yup 👍🏽

[@Jen-qb9cl]

Same. There’s a lot of large cap so it’s diversified too

[@rotocoach5397]

In the Total market allocation, I like to add at least 20% into small cap value (using the ETF AVUV or IJS), which has been shows to give higher returns than a traditional total market portfolio

[@JarradMorrow]

You're like the 15th comment I've received over the past few weeks about allocating a portion of your money towards SCV. Didn't realize how many of you are out there doing this 👍🏻

[@rotocoach5397]

@@JarradMorrow It's probably due to a popular (and very technical) youtuber Ben Felix. He goes through a lot of academic research in his videos, and his most cited work is the Fama-French 5 factor model, where the small cap and value factors have historically outperformed the overall market (but are more volatile as well).

[@Dino-sx9ct]

That's redundant. VTSAX already has small and mid-cap exposure.

[@rotocoach5397]

@@Dino-sx9ct no it's not. VTSAX is only giving you market exposure (the weight in small/mid cap is in the weight of the market.) To get exposure to the small-cap value premium, you have to have larger weight in those stocks.

[@liptongtr]

Thank you, your the first person thats helped me to understand why to diversify even if your young, basically for your own mental health.

[@09Germ]

Wow just want to say awesome quality video and one of the best I have come across on index fund investing. Got so much value 👍.

[@JarradMorrow]

Much appreciated!

[@justxhillin6674]

Listened to this vid like 10 times through this weekend. Thanks dude.

[@JarradMorrow]

Glad it helped!

[@RiceWon]

I appreciate this, especially the "3 Fund Portfolio Benefit #2" section, regarding fiduciaries having to legally act in YOUR best interest vs a general fund manager. Go fiduciaries!

[@JarradMorrow]

👍

[@leo5208]

I'm not a fan of rebalancing because it's mainly a risk-management strategy, not a growth strategy. I started out 60/40, but I let it evolve to a current 80/20 while I reinvested all dividends back into the ETFs automatically--even the BND. This gives me more shares that pay me more in dividends, which I think is better than realizing taxable gains only to throw them into losing bonds on top of the automatic dividend reinvestment.

[@JarradMorrow]

Rebalancing in a taxable account doesn’t always make sense. But if you want to stick to a target allocation then rebalancing makes sense in a tax advantaged account to get you back to where you want to be. Sounds like you wanted to change your allocation which makes sense why you didn’t want to rebalance back to 60/40

[@suavemaurice]

You can always rebalance by buying only. I cut off buying bonds for awhile because the bonds were ahead.

[@reaperboy7274]

Yep. Been in the market for 15 years and never bought a bond. Just been In the S&P 500 95%. It’s giving me the ability to retire before 40!

[@111DAKIDD]

@@suavemaurice ...Question, if your bonds were performing so well that they were outperforming everything else, why cut off buying more bonds and cutting off that great growth? Just trying to understand as a new investor...

[@andrewb9595]

@@reaperboy7274 It may surprise you to know that your allocation has little effect on the ability to retire as early as age 40. What's driving your accelerated retirement date so much is your savings rate more than anything else.

[@kylehackett162]

it's all about the 2 fund portfolio - Total US Stock and Total International. 100 percent equities for the win!

[@SLAYINGVR]

Lol The algorithm finally showed me this video. What an amazing and simple ideology for being a good Stewart with your money. Thank you.

[@thaboog]

My IRA is 100% in VT. So simple - love it.

[@JarradMorrow]

Too much international allocation in VT for my liking. Glad it fits your investing goals though 👍🏻

[@StudCity]

You had me reeled in at 6 years of chipotle😅 Well put together video mate

[@cvinthe2255]

Very clear, concise, and valuable advice. Thanks for posting this.

[@JarradMorrow]

Your welcome! Thank you for the feedback!

[@leifharmsen]

Apart from my 98% in index ETFs I also invest 2% in pet individual stocks just to keep things interesting and fun. In my case I have invested 1% in a US listed geothermal company and 1% in a Canadian listed EV company that makes trucks and school busses. So far one did very well and the other not so much; but both are fun and interesting to follow and learn about.

[@Kevin-bl6lg]

As fun investment, you should keep it below 1m USD into a single company. So, maybe you should spread your fun investment to more companies.

[@BenRangel]

Stats show most fund managers and stock pickers cannot even outperform the index over time. So I always try to tell myself that and go for the lowest fee index funds. But it's easy to get roped into thinking manual picks is the way to go - whenever you do have a success with that it feels sooo good. My bank used to offer an annual talk with a fund guy - and mine gave me a tip for a biotech fund that had a massive surge the next year. I LOVED the feeling. But then had to remind myself I don't know shit about biotech and go back and look at stats which show almost no one can beat the index over time, so I sold it and went back to my index funds.

[@Oivey2000]

Good advice to keep investing no matter what's going on the world, especially today with inflation, gas prices & the war in Ukraine. I kept on investing in 2008/2009 when others dropped out, and recovered well. I have a Vanguard TDF fund which has all your recommended funds under one umbrella (except that I think they allocate a bit too much to international, but it wasn't enough to sway me to go somewhere else) with an allocation that was appropriate for me. Now I'm hunkering down, especially with the dow dropping 1200 points today, and trying to weather this black swan storm since I know I'll be OK in the future. As Jack said...stay the course.

[@NoRegertsHere]

Did you watch the interview Jack did with motley fool? Funny anecdote with an airline pilot. Jack told him to keep investing the same amount every pay day. And not to peak at the total until retirement.

[@Givemegymtips]

About 50k in VINIX. I’m just going to enjoy the ride and buy every dip.

[@lawrenceralph7481]

Learned 2 funds plus cash and of Vanguard ( 70/15/15) from Andy Rudd at Hass Business in the 80s before he moved on to run BARRA. It has worked well. Hurt during big downturns but not too much. Rose with tides in the good times. Still doing it at age 70. Save and invest 20% of your lifetime income this way and you'll have a relative easy, comfortable life.

[@MvskokeWolf]

Which were the 2 types of funds he recommends if I may ask?

[@jimmymcgill5572]

If you’re a 30 something millionaire, and are okay with swings, what etf is best for aggro growth for the next 20-25 years?

[@JarradMorrow]

I have no idea to be honest. If I could see into the future then I’d be a very rich man. Here are my top 5 Vanguard ETF’s if that helps: kzbin.info/www/bejne/o4Soqpqeob-WnrM

[@starwarsjunkie7776]

ARKK. You're welcome.

[@JarradMorrow]

😂😂😂 good joke

[@shadowbug1811]

Try QQQ, MTUM, IHI, IXN and AOA. Do your research on each if you can for what you might want. They should peak your interest.

[@abc123836]

@@starwarsjunkie7776 Why ARKK?

[@noggind614]

Within the past hour I went from 10 to 3 even before I came across this video. Currently 34 and I've had my 401k open at least 5 years. Sitting on 31 and I'd just like to increase how much I'm seeing over the years.

[@dlg5485]

I don't like total market funds if they are market cap weighted because you wind op being way too heavily invested in mega cap companies like Apple and Google and way to little invested in the small and mid cap companies that can really supercharge your returns. That said, this is a solid strategy for someone who wants a set it and forget it portfolio that they only have to look at once a year. However, I think rather than investing in these total market funds, it's a better idea to build a 5 or 6 index fund portfolio that allows you to weight small and mid cap stocks a bit more heavily.

[@user-nj6rk5xs1m]

What would be some good index funds / ETF that have a good balance ?

[@roberttillotson6861]

So funny I listen to your dark swan moments and we are in it now. Still fully investing monthly. Do love your idea on all three. I’ve committed to total U.S. but have thought about same strategy. Glad you confirmed it. I’m actually going with: Total us 70 International 15 Bond 15

[@JarradMorrow]

Yep, we sure are in it right now 😂. When I put this video out the stock market was absolutely ripping so it was a very unpopular view at the time. Nice job staying the course. We should see a few more times like now over the next 50 years so just continue to stay the course

[@steveducell2158]

the general "rule" is to take your age and invest that percentage into a bond fund. Take the rest and put 90 per cent into US stocks, 10 percent into international stocks. Re balance it on your birthday. Simple and low stress. Go to the library and read "Modern Portfolio Management" .

[@holysmokes6709]

To go for this I would have to have been born yesterday so I'll stick with 0% bonds.

[@synshaker9895]

No crypto? You should check it out

[@garrettwilliams6908]

With the increase in multinationals, there's data that suggests you can minimize your direct holding of international indexes/funds. The world is avery crazy place right now, but essentially you can get similar international exposure by investing in the spy index due to many of these companies global presence, with a lower sharpe ratio than adding most international indexes (historically). Just to be totally transparent, I work in credit analysis covering hedge funds but I'm not an invest advisor. And past risk-adjusted performance isn't necessarily indicative of pro forma returns. In any case, the general advice is always to invest based on your objectives and risk tolerance

[@sport07-o2l]

@@garrettwilliams6908 that’s a very solid point. Well worth considering. Thank you.

[@nirupampratapgiri1348]

So, I’m on Fidelity. What two funds do I buy? I have FXAIX. I need an international one and a bond one

[@jeff3olsen]

Great content! The financial advisory industry needs a major revolution!

[@JarradMorrow]

👍

[@bdtrauma01]

great video... just went on my own and starting to build my 3 fund portfolio...

[@JarradMorrow]

Fantastic!

[@Slyndc]

Balls deep VTI 100%

[@JarradMorrow]

Haha me too!

[@michelleachacoso4983]

I love how you put everything in terms of burritos!

[@arvia1984]

I have been using 60/30/10 VTSAX/VTIAX/VBTLX for years, although lately I've been allocating some of my bonds to the I Bonds. Can't beat 9.6% guaranteed.

[@JarradMorrow]

That 9.6% definitely helps protect some of your money 👍🏻

[@georgialee6755]

Andrew Have you done well with this mix?

[@arvia1984]

@@georgialee6755 it depends what you mean. Over the last ten years, I would have done better to be 100% US Stocks. Over the last two years, I would have done better to own no stocks. But you just never know. I've done ok, but it's really a get rich slowly kind of thing.

[@georgialee6755]

Thank you Andrew!

[@r.ryansadeghian8060]

What made you choose mutual index over ETF?

[@ryant5067]

Subscribed just solely based on this video. Switching my 401k away from the personal investment advice through fidelity and rebalancing the account using this approach. Great video

[@fredfells209]

What 3 you chose on fidelity?

[@GoodTrylel]

Great video! I was wondering, how do you go about rebalancing within a taxable account? Since you'd likely want to avoid triggering any taxable event. When rebalancing, would I just focus on adding more money within the allocation that is lower?

[@hermanusbernardusswart4690]

Excellent info for every type of investor. TOPS.

[@JarradMorrow]

Glad you think so!

[@big-daddy-j7879]

Love this idea but I’ve never liked the idea of holding bonds personally. I personally don’t care about the stability aspect of it so I just replace it with an income alternative. I use QYLD to replace BND and the yield of the portfolio increases significantly. I understand there are obvious downsides to this but it’s just what I prefer.

[@JarradMorrow]

I feel the same way as you with bonds. Personally trying to keep an open mind though because I'm sure my opinion will change a little once I'm retired and living off my investments. Glad you found a replacement that works for you. Don't know enough about using a covered call ETF to replace bonds so I'll have to look more into it.

[@big-daddy-j7879]

@@JarradMorrow I use it primarily for income because I personally don’t believe in the “4% rule”. The reason for this is that I just don’t want to leaving my retirement up to selling my assets to provide for my later years. A good alternative to what I’m looking at would probably be having a collection of Dividend King companies (Coca-Cola and 3M) to provide reliable returns. But who knows I’m not an expert, I just am very wary of bonds at this point in time.

[@BrotherK-ex2co]

I agree with you. I got rid of bonds entirely and replaced them with dividend stocks.

[@robyhartland852]

@@JarradMorrow I also do this. Replacing bond funds with QYLD (and NUSI). It absolutely increases the average yield. Though it's never been tested in a an extended recession, so guess we'll see when we hit an extended bear market.

[@n1ggawithaclappedaltima8402]

Switch to jepi

[@pf1971]

I love your channel, it have given me great information. I was wondering have you made 1 about pensions. I will be getting a small 1 when I retire and would like to know about some options.

[@OldBlue83]

Do you recommend VTI over VOO? And If I am retired and have nothing in bonds, do you recommend a bit in a total bond fund now?

[@JarradMorrow]

VTI and VOO are equally great. Don’t know your specific situation so I can’t make that call on bonds for you. When I retire I’ll probably hold some money in bonds. Don’t know how much yet

[@dkeshvala]

Great advice, I agree with you…3 funds are enough. Only issue I have is ones your recommended are not available in UK on Hargreaves Lansdown. Do you which funds match your recommendation with UK/ Hargreaves Lansdown?? Thanks

[@stefanoelias4414]

Great video, but what about inflation? Especially if bonds give a anual return of 2,5% at the moment and inflation is about 7%. Thats a -4,5% return.

[@JarradMorrow]

Bonds within a portfolio are there to help smooth out the ride. Yes, at this point they're going to be losing you money, but they're not going to be as volatile as putting that money into a stock based fund. If you're not close to retirement or already in retirement then something like a 2 fund portfolio could be more ideal. That being said, I know people who aren't close to retirement who still want a little bit of money in bonds. While it doesn't make sense, on paper, for a younger person to hold bonds, if that keeps them invested in the market then I don't see an issue with it.

[@webnplay]

Thanks for the motivating video. I needed this :)

[@leifharmsen]

In Canada it is a little more complicated because we have a tax advantage to investing in Canadian stocks, so I do the same but weighted to Canadian equity by getting an all caps TSX ETF as well.

[@kdk200]

Could do those swap based etfs like hgro, so the dividends are in the price instead of paid out just to reinvest it anyway .

[@imfunatparties9463]

But Canadian stock market doesn't perform as well as the US?

[@callidusj]

Equal weight in the top 25 S&P companies over the last 10 years has crazy returns if you back test it. Obviously that's no promise of future performance, but good companies that win, tend to keep winning.

[@JarradMorrow]

I've never heard of a top 25 S&P 500 equal weight fund. Which one do you prefer?

[@donaldwebster2866]

When the market crashes, you should put even more money in! March 2009 was the bottom of the big crash. Any money you put it at the bottom quickly doubled in value. Think of this way: when the market is down, think of how many more shares you money is buying. When the market is up, think about how much money you've made.

[@JarradMorrow]

Well said

[@michaelmoreton5042]

@@JarradMorrow Lord Rothschild famously said--The time to buy is when the blood is running in the gutters

[@JarradMorrow]

👍🏻

[@emak4558]

Excellent commentary regarding 2007-8.

[@JarradMorrow]

I don’t think it’s talked about/appreciated enough. It’s easy to look back and think “oh I can handle that type of downturn”, but it’s completely different actually living through it. The uncertainty was something most people hadn’t experienced before that time

[@5s4l1p1fcw]

Hard to resist the temptation of a VGT / VCR / VHT! 🙂

[@JarradMorrow]

If those fit your investing style, goals, and you understand them then go for it

[@gk_filer]

I like 50/50 has worked for us in retirement since 2017 Bob Brinker was my mentor starting in 2002

[@investingbeginningtoend4963]

You don't need to hold EVERY stock in the market, the top 100 or 500 work just as well.

[@JarradMorrow]

In the video I mentioned how you could swap a total market fund for an S&P 500 fund. Do whatever works for you and your investing style/goals

[@freedomworks3976]

Vtsax , vigax and vsgax are my 3 Vanguard mutual funds portfolio

[@JarradMorrow]

Happy to hear you found the ETFs that work for your goals 👍🏻

[@67Jasonp]

Great Info! Bonds aren’t looking so great right now with rising rates and inflation. Would you avoid bonds at the time? I’ve heard some people say it’s the perfect time to get into bonds since they are at an all time low. Not sure how true that is.

[@JarradMorrow]

Just like stocks, bonds will fluctuate. Buy and hold instead of trying to trade in and out of them.

[@davidprice2782]

Hi Jarrod, I am new to your channel and love the content so far. I currently have an IRA that I will need to start tapping into in approximately 5 years time. I am 61. Does your 3 fund strategy still work for this and what % split would you use for the 3 funds in my situation?

[@Cdix]

Love the edbassmaster clip you threw in there @JarradMorrow hahahahaha

[@JarradMorrow]

That dude was hilarious back in the day

[@TheRealEdStoner]

Along with 3 funds I would recommend that retired people have 2 to 3 years of liquidity to survive down years.

[@user-wz4db1zn3r]

Well said

[@JarradMorrow]

👍

[@deardaughter]

Why not buy Berkshire B where there’s no fund expense at all and it’s graphs are the same as vanguard and better in some years?

[@NicoVeenkamp]

Very interesting video. Problem is that these funds are not available outside the US. I'm trying to create something similar for funds available in Europe. More research needed so far.

[@JarradMorrow]

👍🏻

[@TheFutureisTheFuture]

that max drawdown happened to me in 2008. I simply didn't look at it more than 1 time for 3 years. It came back and I'm doing very well, even when actual advisors look at my portfolio. So sometimes you really do have to know when to hold them and when to fold them. I'm getting a bit too old to risk like that much longer.... but... 🙂 Everything you are saying I have been doing since 1995 except my new stuff is in a ROTH 401k. Great video.

[@commadanteflet]

Thank you. I'm new to investing but I think understanding the big picture will help me to emotionally handle market fluctuations. Makes sense that selling when low only locks in losses and when you buy in while low, you get in at a better price. If I can guard myself from panic selling, are you saying that the bond index isn't really necessary? I'm 31 and can't say for sure, but I think I'll be fine handling losses and riding out the storm. Can I just forget about bonds for the next 20 years? Also, if I have an IRA and a regular brokerage account, is there any harm in having pretty much the same holdings in both such as 90% VTI, 10% VXUS? I appreciate all the great information!

[@JarradMorrow]

Thank you for the feedback and question! I of course can't tell you what to do with your money, but I can give you some insight into what I'm doing if that helps. My current plan is to start adding bonds to my portfolio once I'm about 5 years away from retiring/needing the money. Until then I'm planning on holding 85-95% in U.S. stock based index funds (like VTI or VOO) and the rest in a total international index fund (like VXUS). The only reason I'm comfortable holding 100% stock based funds is that I can handle the potential wild swings that come along with it. If someone can't then it could make sense to add in some bonds even though that move will eat into your returns a little bit. Building a portfolio that you can hold onto during the good and bad times is more important than trying to chase the possibility of a little higher % rate of return. From a tax efficiency perspective, VTI and VXUS work well in a taxable, tax free, or tax deferred investment account. Technically the best place for VXUS is a taxable account because of the foreign tax credit and technically the best place for VTI is a tax free account. If you don't mind managing the complexity of putting a specific fund in a specific account for maximum tax efficiency then go for it. If that sounds really annoying to you then it's not going to have an enormous negative impact if you just do a 90/10 split in every account to make it simple.

[@user-nj6rk5xs1m]

@@JarradMorrowwhat would be some good index funds / ETFs to get ?

[@JarradMorrow]

Here are my top ETFs and their index fund version kzbin.info/www/bejne/faSTfHWOZs92bdk

[@DavidsBurning]

Currently 100% in FXAIX, investing as much as I can and will eventually balance it out when the market rebounds

[@JarradMorrow]

I like S&P 500 funds 👍🏻

[@TheJaystar101]

Thanks for the advice. Quick quesiton, how does continued investment apply in a situation where I am just planning to buy index funds (non ETFs)? Once I buy them, wouldn't I just need to leave them alone aside from yearly check-in?

[@JarradMorrow]

Yes, just leave them alone. If you can handle looking without allowing it to mess with you emotionally then do it. If it messes with your emotions then check in every 6 months to a year

[@gbass7328]

At what age should working income go from Roth to Trad IRA contributions? 60, 65, 68, etc?

[@JarradMorrow]

It's less of an age thing and more of a current income, current tax rate, future tax rate, current financial situation, and future financial situation thing. There are some general principles, but too much for me to lay out in this comment.

[@stevetrei4801]

Hi Jarrad, thanks for the videos, really good content. I have a quick question about the 3 fund portfolio. I currently do not have this mix and my fund are heavier towards US Growth stocks. With market down like it is now, would you start reallocating to the 3 fund mix now or wait to see if the market recovers? I have a bit of a fear of missing out that if I start moving money towards bonds that it’ll take longer to recover.

[@laurencewright3021]

Your videos are great man, thanks for all your help.

[@JarradMorrow]

Glad you like them!

[@dadybad08]

If you’re young and watching this… same 😂 all I gotta say is no matter how you invest for your retirement (which good job of you do before 25-30) then stick it out through the dips 💪🏽 It’ll be worth it 🙏🏽

[@JarradMorrow]

So true!

[@shaereub4450]

I'm investing in ETF that are somewhat like this except I'm investing in VTI, KOMP, VEA, VWO in my Roth IRA.

[@JarradMorrow]

VXUS would cover KOMP, VEA, VWO, plus more. Why not simplify things by just buying VXUS?

[@shaereub4450]

@@JarradMorrow I'm investing in Betterment, and they don't have that as an option. I'm also keeping a 70/30 stock/bond taxable account for a 8 year down payment goal: stock ETFs: VTI, VWO, VEA, KOMP, Bond ETFs: STIP, VTIP, MUB, TFI, AGG, BNDX, EMB.

[@azaria8825]

@Jarrad I've been binging your channel for a couple days now. I appreciate how well thought out your material is. I'm a complete beginner and I'm just trying to get my baseline and move forward. This video was released last year. Would you still hold the same views on the choices you provided? And two more questions... What are your thoughts on treasury bonds right now? I hear people talking about buying but I feel like I don't know enough about how the current circumstances affect them now and later. And last question... It looks like you mentioned ETFs. Would one also add or consider replacing one of those with something like VFIAX? They may do the same thing so please forgive me if my question is off a bit. I'm not done binging. LOL

[@JarradMorrow]

I appreciate the feedback. 1. Yes, I hold the same views about the 3 fund portfolio. One little asterisks is that I personally prefer the 2 fund portfolio while I'm in the accumulation phase of investing. When I get closer to retirement I'll move more towards the 3 fund portfolio mentioned in this video. Here are my thoughts on the 2 fund portfolio kzbin.info/www/bejne/q2itlqKOjqxlqac 2. If you were planning on putting some money into bonds then ibonds are worth taking a look at right now. I don't have any specific content on the topic to send you to right now. 3. VFIAX is fine if you're using the Vanguard investment platform. I have a video breaking down the difference between Index Funds, ETFs, and Mutual Funds that might help you understand my thoughts on it a little better kzbin.info/www/bejne/rp6yfnV_d6yiZqM

[@azaria8825]

@@JarradMorrow I'm not actually in Vanguard. I'm open to other platforms but it was the only thing I could provide that was leaning more to covering S&P500. Thank you for your reply - I appreciate your time. I'll check out the videos.

[@JarradMorrow]

VOO is the ETF version of VFIAX which I'm a big fan of

[@shun2240]

it always was, and it will continue to be

[@JarradMorrow]

Not according to some people now a days though 😂

[@ADobbin1]

That draw down only matters if you sell at the depressed rate. Otherwise its meaningless.

[@JarradMorrow]

I agree that it only matters if you sell. But I disagree that it’s meaningless. Most people under the age of 40 have never seen a depressed market (that was under water for multiple years) like what happened in 2008 so I think it’s important to point out how ugly it can get. You might be emotionally better prepared for times like that, but there’s a ton of investors who aren’t and would panic sell at the worst times possible

[@chrishansen6956]

I do the one-fund portfolio ha; VTSAX. I’m a big fan of JL Collins’ approach.

[@JarradMorrow]

I’m a one fund person as well. I’ll start adding some bonds into my portfolio in 20 or 25 years 😂. I still go back and forth on the international thing though. I might add a small amount eventually, but who knows when.

[@chrishansen6956]

@@JarradMorrow yeah I’m in the accumulation phase right now so no bonds yet.

[@JarradMorrow]

Smart. Keep up the good work 👍🏻

[@akin242002]

From November 2001 to October 2021, VTSAX has outperformed the 3-fund portfolio after adjusting for dividends and inflation. 12.26% according to portfolio visualizer and invest the same amount each month.

[@trent40]

@@JarradMorrow Wait so you're calling three fund "king" but you don't do it yourself? Hmm...

[@Z06SmokeShow]

Question. How come you recommend the FXKAX over the FZROX? Any feedback would be helpful. Thanks man! New subscriber here!

[@Yahniboy]

Better to out in in just one fund SCHD. Three year average returns are 24%

[@JarradMorrow]

Why? Are you older looking for the immediate income from dividends?

[@BookishOwl2]

3 years is a very short period to judge returns. I hold schd but 3 yr return is not why.

[@elchinitowantan]

Is Bershire Hathaway a good option?

[@JarradMorrow]

I have no idea

[@Dysfunctionality15]

I like to complicate my portfolio a bit with a Small-Cap Value tilt, which has been shown by Fama/French, historically, to have a risk-adjusted return that outperforms the broad market. But I agree entirely that the average investor would be best off with a simple 3-fund portfolio.

[@rotocoach5397]

Yup. In my US market portion of my portfolio, I have 70% into VTI and 30% into AVUV to get a good amount of exposure to small cap value

[@PJBHolden]

I go with VTI and Wellington

[@earlwilliams5473]

I recommend Schwab to get your vanguard ETFS. Careful of FED INTEREST RATE HIKES ( BONDS ) suffer. I'm not an adviser.

[@JarradMorrow]

👍🏻

[@davidbrooks8809]

My 3 Fund: 1. Berkshire Hathaway 2. VTI 3. VNQ

[@JarradMorrow]

Glad it fits your investing style 👍

[@angelinaroman8601]

Hey Jarrad! I'm a new subscriber and new to investing. I opened a Roth Ira with Fidelity few months ago and I had already met my annual contribution. I just place an order for FXAIX (like $3k). I've been watching some of your videos and I'd love to build my portfolio following your recommendation of the 3 funds, but I'm still very confused (the names and terminology are confusing to me) could you please tell me what other investment should I go for? Like FXAIX and VOO are more of the same? Help!!

[@jamesmir89]

i think what you need to look for is a total market index fund, he gave VTSAX or VTI as an example because those are exclusive to Vanguard, i believe. so, basically, Fidelity’s version of the total market index fund, international, and bond index fund. edit: he actually puts the three funds there at around the 9:40 mark for Fidelity.

[@bfry38]

Pretty much the same thing I have. I'm mostly all VTI. I have VEA and then just a couple of different stocks I personally like, but i'm 85% VTI, 10% VEA and 1% of my other 5 stocks.

[@mickeybush7332]

And most mutual funds managers don’t eat there own cooking 🤪

[@JarradMorrow]

Great great point!

[@GretschDrummer01]

what are your thoughts on replacing the international fund with a large cap growth? Replacing the bond fund with a dividend fund?

[@JarradMorrow]

Large cap growth stocks are not international stocks so it isn't a good "replacement". Dividend stocks are not bonds so it isn't a good "replacement". A Total U.S. stock fund has all of the growth and dividend stocks in it already. The point of a 3 fund portfolio is to give you global exposure across all asset classes without adding complexity to your portfolio. Here are my thoughts on the downsides of creating a portfolio that's too complex: kzbin.info/www/bejne/o53SlIOoa8h5aJo

[@mj1961christian]

Josh, I’ll be 61 this fall. Vanguard has me currently in a 70/30 portfolio and will eventually have me in a 60/40 portfolio during most of my retirement years. 40% VTI 30% VXUS 20% BND 10% BNDX I’ve never been a big fan of bonds or international socks. Do you think Vanguard has me allocated right for my age? Thanks, look forward to hearing from you,

[@Rainy_Day12234]

Seems a little aggressive for your age. For me 50/50 bond/stock at 60, 60/40 bond/stock at 65, 70/30 at 70

[@alphabeta644]

Clicked like for molly. what a cute dog.

[@JarradMorrow]

She appreciates it!

[@financialsombrero9097]

Hello Jarrad, thanks for the Luck vs Skill article reference . One question though, I read "Bogle on Investing" years ago: If I recall, he firmly believed that owning the S&P 500 and avoiding international was the best approach, which has proven to be the correct approach historically. He didn't like international fund's risk of currency for instance. Now my question, what specifically pushes you into international funds on your recommendation? Great vid by the way, Subscribed.

[@joes9545]

I believe he answers this starting at about 14:30.

[@jec1ny]

Jack later softened his views on international index funds. He still believed you should overweight US stocks, but he was fine with 10-20% in international.

[@Excalibur2]

Depending on what years we're talking, the international market has beaten the US market 50% of the time. It's just been a long 10+ years of the US outperforming international.

[@Daniel-od1hq]

@@Excalibur2 Which might mean we are headed for international stocks to take the reigns for the years to come? Maybe?

[@Excalibur2]

@@Daniel-od1hq that's the thing, it's been like a decade of underperformance. Surely they have to catch up at some point, you'd think.

[@CommandoMaster]

Very good info man.

[@JarradMorrow]

Appreciate it!

[@NaNa-lt1po]

How about a 4 fund portfolio like below: -vgt/vti/voo(sp500) -smh (chips) -xlf (finance) -rth (retail) That covers the best of every sectors

[@JarradMorrow]

I usually don't do public math, but that sure looks like more than 4 funds 😂. You know what else covers every sector that would make life a whole lot easier?....a total u.s. stock index like VTI.

[@michaelnitake2534]

Love your recommendations Still there is the issue of portfolio location and withdrawls

[@mattatuckmanful]

I put all my money with Cathie Wood and all i got was this this t shirt.

[@JarradMorrow]

😂 if you make that shirt I'd bet you'll sell a lot

[@solohomesteader]

Yo, Bradley Cooper, thanks for the info! :)

[@alex5308]

If you’re under 50, don’t waste your time with Bonds. I wouldn’t waste my time with international funds either, they suck

[@JarradMorrow]

I agree on the bonds and could go either way with international funds

[@georgesontag2192]

Why buy international stocks when the large us companies are already doing business internationally ? . Example : catapillar, IBM, Microsoft.

[@JarradMorrow]

Because you're still not getting true international exposure. The point of holding a total U.S. fund and a total international stock fund is to get full exposure to the whole world. If you only want a little bit of international exposure that comes from the U.S. based companies then that's fine

[@andrewsnyder9262]

Psh full send on the broad market until the day I die.

[@Osay1216]

i would not use the bond fund but you are on the right track

[@JarradMorrow]

Bonds aren't for everyone, especially when you're very far from needing the money. I prefer the 2 fund portfolio then eventually transitioning into a 3 fund portfolio as you get older