SIMPLE 3 Fund Portfolio to CRUSH the S&P and Build Your Million Dollar Account.

#etfinvesting #bestetfs #topetfs
This is a 3 fund portfolio that historically beats the S&P 500 for performance and yield while reducing max drawdown. It offers limited fund overlap and diversity across many sectors of the US market.

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0:00 Intro
1:31 The 3 funds
3:20 The holdings and sectors
5:08 Fund Overlap
6:43 Historical Performance
8:45 Summary

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[knockoutlightz]

I have a 3 fund portfolio but I have finally decided to invest in ETFs, alongside. I’m looking at SCHD, VOO, XLK or SCHG.

[Gman-]

Love these kind of videos! Thanks Dave

[jamiechen]

I used to also think SCHD is thee best balanced ETF as well. But now I found IYK is an even better suited ETF for this portfolio. If I replace SCHD with IYK, the total returns are about same for 10 years and 1% better for 5 years in back test. More importantly, this portfolio beat SPY in all measures: best year: 31.64% vs 31.33%, worst year: -5.76% vs -18.23%, max drawdown: 15.96% vs 23.95% for the last 5 years.

[RichMoeckel]

I like JEPI for 9.59 yield every 30 days! It's a beast. SCHD and DIVO are my others

[Tommy_ZM]

55% VGT and 45% SCHD is the best portfolio in terms of risk/reward

Growth should beat value, but depending on when you start your backtest you’ll see value sometimes does better. 65% Growth 35% value gives you a better chance to win but understands that value has a place. This helps diversify AND reduce risk. Lots of diversification is false and doesn’t reduce risk. It also has about 2 times the amount of tech as VOO, the typical S&P. Tech is what makes the world move and there’s a reason why the S&P’s largest position is tech. Tech historically does the best and most likely will do the best, but there are plenty of markets where tech can go down. You don’t want 100% tech, but having about 50% in high quality tech (like apple and Microsoft rather than Facebook and Tesla) gives you the high returns without astronomical risk.

[davesaint]

Also, look at swapping out XLK with XLP. Lower return and lower drawdown, but still good returns.

[moneymanfernando]

I only own SCHD out of these three however I own a lot of other ETF`s. I am mostly interested in income now and some growth. I do like these videos blending different etf`s.

[CharlesTriesToRetire]

VGT, SCHD, BND in a 60/30/10 crushes this portfolio over every time period. It also has less max draw down. The problem is that as I played with things the result varied wildly with even small changes. Pick 20% BND and suddenly it was a bottom performer. Pick a slightly higher ratio of SCHD and it still works. Bump it up again and boom you are below voo.

I got really good results with your portfolio using 40% XLK and XLV and 20% SCHD. Still beat VOO. But then some variations tank.

I'm beginning to think that this stock market thing has some randomness to it that makes back testing less useful than it feels like it is.

[vestedinterest]

I recently sold out of many of the positions I had picked up in my daughters custodial accounts. I'm looking at a mix 50/40/10 for their accounts SCHD/VUG/Individual stocks. Appreciate the content.

[troythomas]

I have an idea about using a variant of this inside a Health Savings Account. I am about to retire at 64 with 1 million dollars. The HSA has roughly $100, 000. I will not be able to contribute anymore after 1 year. I will be using this fund to pay health bills. I am considering the following: 50% SCHD, 25% JEPQ, and 25% VYMI. SCHD AND JEPQ give protection in a draw down and VYMI gives diversification with international funds the overlap comparison looks really good and all three give good dividends to pay the health bills. What do you think. P.S. started my 20 year old daughter with exactly what you have except 50 xlk, 25 schd and 25 xlv.

[jordanw]

My Roth IRA has VTI, XVUS, VNQ (50%, 25%, 25%.. that’s Total Stock Market, International Stock Market, and Real Estate ETF).

My brokerage account has mainly SCHD. I am also in Realty Income for the monthly dividend.

[teslacybertruck]

Great content! I will try to invest this way! Thank you!

[muratshogenov]

Thanks! I got schd, Schv, SCHG, Schx (30%, 30%, 10%, 20%). But I’m going to rebalance with xlk. And reduce Schx.

[josephburke]

Thoughts on XLK versus QQQ? Historically, QQQ has signicificantly outperformed XLK and has more diversification.

[brucef]

Interesting. Thanks for planting the seeds. XLV and XLK were not on my radar previously. I'm also an older investor and share your concerns with max drawdown and equally important tax efficiency as most new money has to go into regular investment accounts.

[Yetitrader]

Thank you for the very good video. Looks like XLK doesn't include TSLA. What do you think about replacing XLK with SCHG to get some exposure to TSLA?

[philelmo]

Never considered XLK and XLV, thanks. Gonna sell puts on it to own some in the growth account instead of TQQQ which I worry about if I really do get put, but it’s very rare due to the high IV. I’ll compare the IV on XLK/XLV vs TQQQ. Atleast TQQQ is easy to roll whereas when I tried XLF it is very hard to manage/roll

[scarfo]

you said that these funds beat the s and p 500 going back 10 years?...i hope you back tested longer than that...i dont trust no backtesting from 2009 til 2020...that was the time the fed pumped all that money into the markets...id like to see how it does around and or between 2000 til 2003 or 04

[susansigner]

I prefer a mix of:
50% SCHD Health & Consumer
40% NULG Tech & Financial
10% XLK Tech

[jamesec]

I like it. I’d also add XLU as interest rates start to come down at some point. Hopefully.