Invest In These 2 ETFs To Double Your Money

I recently made a video about how the 3 fund portfolio is the best way to invest your money in the stock market. While I still believe that to be true I like investing in a 2 fund portfolio a lot more...but only under certain circumstances. In this video, we'll go through why I like both the 2 and 3 fund portfolios, what makes them so different, and when you should choose the 2 fund portfolio over the 3 fund portfolio. Since investing in bonds is such a hot topic right now I'll also touch on the importance of investing in them within a 3 fund portfolio.

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Benefits of a 2 and 3 fund portfolio:
Diversified- Both of these portfolios spread your money across thousands and thousands of stocks. This diversifies your money among different companies, sectors, countries, and even currencies.

Zero Portfolio Overlap- Because you have 1 U.S. Stock fund to handle the companies based there, and 1 International stock fund to handle the rest of the globe, there is zero portfolio overlap. This becomes a problem when you own the same stock within multiple funds without realizing it.

Low-Cost Investing- For every $1,000 invested you're only paying 30 cents and 80 cents per year. Compare that to an expensive actively managed fund where you pay $7.50 per year. An index fund based portfolio like this is 26 times less expensive than an actively managed fund.

No fund manager risk- One of the biggest risks of investing in any fund is with the manager who runs that fund. If they start taking on more risk than they should then you have a higher chance of losing money. With an index fund based portfolio there is no fund manager picking stocks which removes the human error and emotion that comes along with trying to beat the index.

It's simple- Simplicity is so important for investing because it reduces your chances of accidentally making mistakes. Rebalancing your portfolio is simple. Allocating money across 2 or 3 funds is simple, withdrawing money from 2 or 3 funds is simple.

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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.
#indexfunds #investing #stockmarket

[JarradMorrow]

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[Gio-ceob]

I love how you point out what most people screw up on, the fact that having VOO and VTI gives you a LOT of overlap. Most don’t realize that and that’s why I would never do that. I prefer VOO out of the two.

[blinddog]

"Better Than The 3 Fund Portfolio" made me laugh and think about - There's something about Marry movie when Ben Stiller picks up the hitch hiker and they talk about the 7 min abs vs 6 min abs....

[JasonKeenanEsq]

Great advice. I'm trying to sort out the right allocations for a 2 or 3 fund portfolio in Canada - quite the adventure.

[PierceJPeterson]

Love Vanguard index funds! Excellent video, Jarrad!

[auricgoldfinger]

Running man!
Correct decision with the 2 fund option, just wrong 2 funds. 80/20 S&P/ munis. I was a big proponent of international 30 years ago, but most currency fluctuations account for a lot of disproportionate gains. S& P gets 40% of profits from external to US. Skip internationals

[avinashahuja]

Love your content! Super helpful and fits my doubts and investing style perfectly! Keep it up beast!

[viniciusjardim]

I'm from Brazil and I'm impressed with the quality of your content, thanks for that! You opened my mind. From now on I will invest only in VTI because 50% of my equity I will still keep in Brazil, which is where I have my consumption

[astrahl]

My current portfolio at 29 years age is 77% US Index (VTI) 18% International index (VXUS) and 5% Bitcoin. Holding this until I’m about 10 years out from retirement and will add maybe 30-40% bonds

[liranzo]

Hey Jarrad. Thank you for your videos. I have found them very helpful. I am very confused about the no rebalancing example. I understand what you explained. However, I thought no rebalancing meant (in the 2 fund example), that 80% of the contribution was allocated to VTI and 20% of the contribution was allocated to the international stock etf no matter what the ending balance of the portfolio would be. Did Jack Bogle specify the strategy that you outlined in the no rebalancing portion because as you stated, that is a form of rebalancing. Instead of calling it no rebalancing, he should call it something else.

How would one even automate that style of investing? I mean if the VTI falls to 60% while the International fund is up to 40%, then 100% of your contribution would be going to VTI and 0% would be going to the international part. So the contribution percent into each fund will be different from time to time. Do brokerages offer a function that does this?

[joesphreiley]

You are absolutely correct, two funds using dollar cost averaging, I have FZROX and FTIHX.

[Cornelious]

I use the same---except 20% toward small cap value (60 total us and 20 total international)

[JulieN-nkky]

Thank you for your videos! You probably are the most helpful YouTuber I watched. You say the truth, and truly try to make people grow their money in a smart and secure way!

[donbright]

Jack Bogle plan for investors is excellent, best thing ever for investors.

[Andrew.Ferguson]

Really good video Jarrad, and I liked the reasoning behind why you should include bonds in a bond with a long term perspective. However, as an alternative, instead of buying bonds, could you instead invest and buy some downside risk protection in the form of buying put option contracts with a 3-4 month expiry date? That way, if there is a decline in the market you profit greatly with these in your portfolio and in normal conditions when things are trending positively, they are like buying insurance on your investments and make up a small % of your portfolio.

[BenJune]

The only two funds you need for an outstanding portfolio is VOO (lower cost to hold than VTI), and SCHD (for dividends...tracks top dividend paying companies in the DOW). Thats truly it folks. VOO and SCHD for life.

[shaereub]

Betterment has a portfolio called: Betterment Core which has small mid & Large Cap in addition to VTI, VEA, VWO. Why? Putting more weight into the US rather than even amount in VTI, VWO, VEA.

[Metaris]

100% with you on the different phases. I'm at least 20 years from retirement, so I'm 100% stocks rn. That'll change as I get closer to the finish line, but for now I'm staying the course.

I will say, tho, that bonds are also on sale rn. I need to look into historical growth of bonds after high inflation periods. If they hockey stick it might be worth having some on hand, too.

[bullsnbeers]

Hi Jarrad! Sorry for the stupid question but...what about a strategy with ONE ETF that covers the whole world, like for example the Vanguard VT? Or do you think that the combination VTI+VSUX would give a higher return or a better risk coverage? Many thanks for the content 👍

[rajthomas]

Why not just buy VT instead of the two ETFs for US and International stocks?