The Bogleheads' Guide to the Three-Fund Portfolio
How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk
1. Edition August 2018
112 Pages, Hardcover
Wiley & Sons Ltd
ISBN:
978-1-119-48733-3
John Wiley & Sons
Further versions
Twenty benefits from the three-fund total market index portfolio.
The Bogleheads' Guide to The Three-Fund Portfolio describes the most popular portfolio on the Bogleheads forum. This all-indexed portfolio contains over 15,000 worldwide securities, in just three easily-managed funds, that has outperformed the vast majority of both professional and amateur investors.
If you are a new investor, or an experienced investor who wants to simplify and improve your portfolio, The Bogleheads' Guide to The Three-Fund Portfolio is a short, easy-to-read guide to show you how.
FOREWORD BY JOHN C. BOGLE xi
PREFACE: THE HISTORY OF THE BOGLEHEADS'
THREE-FUND PORTFOLIO xvii
ACKNOWLEDGMENTS xxv
CHAPTER 1: THE INVESTMENT INDUSTRY 1
CHAPTER 2: JOHN C. BOGLE--THE INVESTOR'S BEST FRIEND 5
CHAPTER 3: JOHN BOGLE INTRODUCES THREE TOTAL MARKET INDEX FUNDS 9
CHAPTER 4: TWENTY BENEFITS OF TOTAL MARKET INDEX FUNDS (IN NO PARTICULAR ORDER) 13
Benefit1: No Advisor Risk 14
Benefit2: No Asset Bloat 17
Benefit3: No Index Front Running 19
Benefit4: No Fund Manager Risk 20
Benefit5: No Individual Stock Risk 22
Benefit6: No Overlap 24
Benefit7: No Sector Risk 25
Benefit8: No Style Drift 26
Benefit9: Low Tracking Error 27
Benefit10: Above-Average Return 28
Benefit11: Simplifi ed Contributions and Withdrawals 32
Benefit12: The Benefitof Consistency 33
Benefit13: Low Turnover 34
Benefit14: Low Costs 35
Benefit15: Maximum Diversifi cation (lower risk) 38
Benefit16: Portfolio Effi ciency (best risk/return ratio) 39
Benefit17: Low Maintenance 40
Benefit18: Easy to Rebalance 41
Benefit19: Tax Effi ciency 42
Benefit20: Simplicity (for investors, caregivers, and heirs) 44
CHAPTER 5: GETTING STARTED 49
CHAPTER 6: STAY THE COURSE 59
APPENDIX I: WHAT EXPERTS SAY 63
APPENDIX II: MEET THE BOGLEHEADS 69
GLOSSARY OF FINANCIAL TERMS 75
INDEX 7
PREFACE: THE HISTORY OF THE BOGLEHEADS'
THREE-FUND PORTFOLIO xvii
ACKNOWLEDGMENTS xxv
CHAPTER 1: THE INVESTMENT INDUSTRY 1
CHAPTER 2: JOHN C. BOGLE--THE INVESTOR'S BEST FRIEND 5
CHAPTER 3: JOHN BOGLE INTRODUCES THREE TOTAL MARKET INDEX FUNDS 9
CHAPTER 4: TWENTY BENEFITS OF TOTAL MARKET INDEX FUNDS (IN NO PARTICULAR ORDER) 13
Benefit1: No Advisor Risk 14
Benefit2: No Asset Bloat 17
Benefit3: No Index Front Running 19
Benefit4: No Fund Manager Risk 20
Benefit5: No Individual Stock Risk 22
Benefit6: No Overlap 24
Benefit7: No Sector Risk 25
Benefit8: No Style Drift 26
Benefit9: Low Tracking Error 27
Benefit10: Above-Average Return 28
Benefit11: Simplifi ed Contributions and Withdrawals 32
Benefit12: The Benefitof Consistency 33
Benefit13: Low Turnover 34
Benefit14: Low Costs 35
Benefit15: Maximum Diversifi cation (lower risk) 38
Benefit16: Portfolio Effi ciency (best risk/return ratio) 39
Benefit17: Low Maintenance 40
Benefit18: Easy to Rebalance 41
Benefit19: Tax Effi ciency 42
Benefit20: Simplicity (for investors, caregivers, and heirs) 44
CHAPTER 5: GETTING STARTED 49
CHAPTER 6: STAY THE COURSE 59
APPENDIX I: WHAT EXPERTS SAY 63
APPENDIX II: MEET THE BOGLEHEADS 69
GLOSSARY OF FINANCIAL TERMS 75
INDEX 7
TAYLOR LARIMORE is a sage on the Boglehead forums for everyone who wants to discover "the Boglehead way." Crowned the "King of the Bogleheads" by Jack Bogle, he has spent more than seven decades in finance and investing, in such positions as revenue officer for the IRS, chief of the Financial Division for the Small Business Administration in South Florida, and a director of the Dade County Housing Finance Authority. He is co-author of The Bogleheads' Guide to Investing and The Bogleheads' Guide to Retirement Planning.
