I donāt have the necessary expertise to evaluate the portfolios, but I would be curious to know what you usually recommend to the people you advise. Is it closer to all-stocks, 3-fund, or something else? Or is it highly dependent on the specific individual financial situation?
First, I want to be clear Iām not an investment advisor.
But with that out of the way, I almost always lean towards the 3-fund portfolio. Itās easy, low-cost, transparent, and leads to the least amount of speculation. My personal strategy is āset it and forget itā. I rarely look at fund performance, Iām just playing the long game and investing in as many types of assets as possible that require minimal-to-zero effort on my part. With that said, I do tailor my 3-fund strategy to my specific financial situationāitās minimal tailoring, but I focus on my allocations (stocks vs. bonds broadly speaking) and the types of accounts Iām investing in (e.g. 401k vs. regular investment account).
If I am to question this strategy, itās in one of the legs of the 3-fund stool. I have no major qualms with investing in the index funds that represent the stock market (maybe some moral ones but generally speaking not really). Where I pause is with Bond Funds. Stocks are meant to support growth in your portfolio (and maybe dividend payouts). Bonds? Well what are they for? To perform well when stocks are down? To provide consistent cash payments? To stabilize your portfolio? Provide inflation protection? Total Bond funds like BND try to do all of this and as a result kind of do none of this.
So TLDR: I think itās worth considering a more tailored bond strategy that is specific to your financial situation, where as you probably donāt need to be doing this with stocks.
With all that said, the more you tailor the more you speculate!
Thanks for sharing!
I donāt have the necessary expertise to evaluate the portfolios, but I would be curious to know what you usually recommend to the people you advise. Is it closer to all-stocks, 3-fund, or something else? Or is it highly dependent on the specific individual financial situation?
First, I want to be clear Iām not an investment advisor.
But with that out of the way, I almost always lean towards the 3-fund portfolio. Itās easy, low-cost, transparent, and leads to the least amount of speculation. My personal strategy is āset it and forget itā. I rarely look at fund performance, Iām just playing the long game and investing in as many types of assets as possible that require minimal-to-zero effort on my part. With that said, I do tailor my 3-fund strategy to my specific financial situationāitās minimal tailoring, but I focus on my allocations (stocks vs. bonds broadly speaking) and the types of accounts Iām investing in (e.g. 401k vs. regular investment account).
If I am to question this strategy, itās in one of the legs of the 3-fund stool. I have no major qualms with investing in the index funds that represent the stock market (maybe some moral ones but generally speaking not really). Where I pause is with Bond Funds. Stocks are meant to support growth in your portfolio (and maybe dividend payouts). Bonds? Well what are they for? To perform well when stocks are down? To provide consistent cash payments? To stabilize your portfolio? Provide inflation protection? Total Bond funds like BND try to do all of this and as a result kind of do none of this.
So TLDR: I think itās worth considering a more tailored bond strategy that is specific to your financial situation, where as you probably donāt need to be doing this with stocks.
With all that said, the more you tailor the more you speculate!