Sample Portfolios (for Americans)

From Simplest to Slightly More Complicated using Vanguard Index Funds

1 Fund to rule them all - Target Date Retirement Funds (Stocks and bonds together, Vanguard rebalances for you)

Decide what year you want to retire.

Pick the fund that is closest to that date.

Buy that fund forever.

Done! https://investor.vanguard.com/mutual-funds/target-retirement/#/

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Great, but what are the ticker symbols?

But if you want more control, you may want a 2 fund solution.

1 stock fund that contains the majority of your money

1 bond fund that contains the minority of your money

You have to rebalance and decide how much goes where.

Great, but what are the ticker symbols?

Stock Index funds

VT - Covers the whole world’s markets, still at least 50% US Companies. Expense Ratio: 0.1%. 5 year return average: 10.4% (Newer fund)

VTI - Covers US Stock market only. Expense Ratio: 0.04%. 10 year return average: 9.85%

VTSAX - US Markets, but requires a larger initial investment, $10,000. Expense Ratio: 0.04%. 10 year return average: 9.89%

Great, but what are the ticker symbols?

Bond Funds

BND - All bonds. Expense Ratio: 0.05% 10 year average return: 3.45%

BSV - Short Term Government Bonds (Andrew’s favorite). Expense Ratio: 0.07% 10 year average return: 1.97%

Figuring out your Stock to Bond Ratio with a 2 fund portfolio

It’s kind of complicated and there are a lot of answers.

Read through https://thehappiestteacher.wixsite.com/blog/blog/investing-philosophy-stock-bond-allocation-and-rebalancing for how I figured it out for myself. It links to lots of good resources as well.

I went with an 80/20 Stock/Bond mix.

If you do the Target Date Retirement Funds, you don’t have to worry about this, Vanguard does it for you.

Index Investing With a Twist

In Andrew’s book, the last system he covers is what’s called Fundamental Index Investing. Vanguard literally just came out with Fundamental Index Funds. The difference with traditional index funds is kind of complicated, and I’ll give links for further reading, but you can substitute the Fundamental Index Fund you feel is right for you. Just know that their fees are a bit higher, and they’re pretty new. Many people find them attractive for their higher average returns. After reading Andrew’s book I switched from traditional index investing to Fundamental Index Investing.

The overview of Vanguard’s new funds

Fundamental Index Funds vs. traditional Index Funds - Andrew’s take

What if you’re not American?

First of all, congratulations!

Second of all, Andrew’s book has chapters for you too! Once you figure out the system you want to do, check out the chapter for your country and he’ll have the pertinent information.

No matter what, you SHOULD be able to buy appropriate index funds for what you want.

He also goes over a couple of other portfolio’s like the couch potato and another 3 fund portfolio. Basically, the couch potato fund has gold in it, and the 3 fund portfolio is just a mix of the world index fund and the US index fund with a bond fund.