3-Fund (+1) Portfolio Strategy

The 3-fund portfolio strategy is a simple, low-cost way to build a diversified investment portfolio. By owning just three simple low-cost index funds, a total US equity, a total US bond, and a total international equity, all of us can outperform the vast majority of mutual funds out there. But what if we want to add a bit more flavor to our 3-fund portfolio? You got the 3-fund portfolio down, but you like to jazz it up a bit. What would be a good addition? So in this video we are going to talk about the 5 most popular 4th additions to the 3-fund portfolio strategy.

Timecodes:

0:00 - Intro
0:35 - 3-Fund Portfolio 101
2:49 - REIT
3:58 - Rental Property
5:46 - Small Cap Index Fund
7:47 - Mid Cap Index Fund
8:39 - International Bond Index Fund

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DISCLAIMER: I am not a financial adviser. These videos are for educational and entertainment purposes only. I am merely sharing my personal opinion. Please seek professional help when needed.

[redeemedrascal]

I honestly appreciate you from the way you brand yourself to the knowledge you give us beyond finances, PLEASE STAY THIS WAY😂

[BarbellFinancial]

I stick with the 3 fund portfolio. It still provides exposure to real estate.

[GreySox]

Love the ending metaphor: Kimchi with meat and potatoes. Yum. My kimchi is also an out of state rental property.

[jecny]

For most of the last 15 years I've kept about 10% of my holdings in hard assets as a hedge against unexpected events or currency volatility. I keep it simple with 5% in VNQ (real estate) and 5% in IAU (gold). Beyond that it's a three fund portfolio.

[alexanderlyon]

Great information. I'm thinking about opening a REIT account in 2023. Helpful and timely video!

[fredswartley]

I like the additions you mentioned. Small cap value has been shown to outperform the market over a long period of time.

[sctt]

Tae, your channel stands out from others by a far margin. 1. Your content is straight forward and easy to understand. 2. You don't boast your success as clickbait. 3. You offer geniune, honest information. I'm a fan. One question, if you have you a minute. Or if anyone else knows the answer. As for individual stocks and VTSAX, should I sell my individual stocks and buy VTSAX or just keep them. I know there will be capital gains tax to pay if I do this. Anyone have a suggestion? Thanks in advance.

[mqguitar]

I just found your channel and I wanted to say thanks. I see the hard work you put into the videos and channel. From the quality, the research, your wisdom, and your clear cut simplified explanations. I appreciate it tremendously and you are helping change my family tree in finances.

[lanetaglio]

You were SO right about Tesla NOT staying on top forever! Glad I listened to you.

[shumatsuopost]

Now this is what I call a perfect strategy!

[doug]

And I'll say it again - I am very impressed with the graphics, slick editing, and smooth transitions. Well done.

[hitenpokar]

Very sensible and pragmatic advice. Timeless.

[kitkarson]

Hi Tae.. I like your videos. Have a question. Which strategy you follow? Can you please share that?

[doug]

My entire portfolio is 80% VTSAX and 20% VTIAX. I don't go deeper with factor tilts because that's slipping away from the main idea of Bogle's philosophies - Simplicity and keeping costs down. I've been tempted by the literature supporting Small Cap Value, but I'm turning 40 this month. There are *decades* where SCV may underperform and I'd rather not introduce that risk to my portfolio. I'd steer people towards Avantis' AVUV for Small Cap Value as there are better quality filters for their choices compared to the Vanguard Small Cap ETF.

[Brettp]

Good videos. Personally I think gold (physical gold preferably, such as ticker PHYS) would be a good fourth addition to the portfolio. Gold has proven to protect purchasing power over long periods of time and will be negatively correlated to stocks and other risk assets in certain economic environments thus giving the overall portfolio less volatility.

[LOVE-JC]

Stock/ international/ bonds . SCHD in Roth 401k 3 stages tax efficiency after 5 years. 59.5 tax fee?

[monicakim]

Hi can you do the same index fund with charles schwab? Thankyou always for all ur recommendations!!

[qq]

FOUR FUND COMBO 25% each.... LCB, LCV, SCB, SCV

[mattatoBTO]

What an amazing find this channel is... literally the only reaching gripe is the amount of bots in the comments

[razzberry]

my retirement plan only offers vanguard institutional 500 index trust + vanguard institutional extended market index trust...would the latter be an acceptable substitute for VIMAX + VSMAX?