How Many Investments Should You Own?

How many investments should we hold in our retirement and taxable accounts? This video will start with a diversified portfolio using just one mutual fund. Then, we'll look at five reasons we might want to complicate the portfolio, at least a little bit.

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ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

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[stevec.]

I like what Rob had done before in the past; VOO, SCHD, VXUS, and BND. Done!

[beachbum]

100% Stocks is the best way to go. You'll have more money in the long run. You have to lower your spending some down years, but overall you'll be able to increase your spending most years and end up with more money overall!!!

[yhckelly]

VFORX for the win. I love target retirement stuff. It's like the Crock-Pot of the investment world. Set that rascal and forget it. When dinner time comes, it's ready. And all you had to do was push one button. Perfect.

[prkeene]

The higher expense ratio of target date funds and their unalterable stock-bond allocation is why I switched my 401k to an effective 3-fund using available Fidelity core funds.

[ianwhitehead]

You have a way of laying out material that makes this less daunting for people - demystifying the process. Folks like you helped me to have the guts to stop using a 1.5% manager. I appreciate it.

[davidfolts]

I like the Couch Potato Portfolio; it's no fuss, no muss, and easy for my wife to follow should I pass away first.Simplicity can be sophisticated.

[ericlaukonen]

There is something to be said for diversifying for counterparty risk and national financial repression risk. A small percentage of the portfolio should seek some hedging in this area. If vanguard implodes it may be some waiting period to get access to your funds.

[MC-gjfg]

I've generally been a fan of avoiding bonds unless closing in on retirement, and I don't mess around much with investment outside of the US. Target date funds, meanwhile, never have a mix I like and typically have higher expense ratios that I simply don't see paying for themselves.

I DCA monthly and maintain about a 50% S&P, and 15% small cap mix. With the remainder, I periodically buy into a few S&P sector tilts towards sectors that have outperformed the market for the past 25 years, such as the nasdaq, consumer discretionary, and healthcare. The first two are volatile, and I tend to add to the positions during a significant dip, while healthcare has marginally outperformed the S&P, but with less volatility.

I've been increasing my cash position as of late. You can't beat getting over 5% on your money risk free and staying nimble for any opportunities that may present themselves.

[gabrielenicolini]

Hi Rob - thank you so much for the clarity. Here in Italy Lifestrategy & similar from other providers are offered at 0.30% therefore people prefer to stay on single etf and rebalance strategy. As always a great pleasure to listen to your thought process!

[davlogic]

Excellent investment advice Rob. For anyone interested in having control over their investments this is a great roadmap. Tax strategies are my main concern with less than 3 years before retirement. Keep these easy to understand videos coming.

[J--vi]

Another reason to have more than one single diversified fund is, for when you need to start withdrawing from your portfolio, to give you optionality on where to pull funds from. For example, if stocks are down and bonds are stable or up, you would like to pull the funds from the bond fund. With only one fund, the withdrawal is pro-rata to the funds that make the one diversified fund.

[mikederucki]

I saw a family trust holding 50 tickers. Complexity is job security for these guys

[Wawalsh]

I truly appreciate your videos, thank you.

[knighteffsix]

I would think that one additional reason to opt for multiple funds is the ability to liquidate only bonds or only stocks as needed when one needs cash. If the stock market is down, for example, I might sell some bonds for my cash needs. And if stocks are up, I might take some profits there for cash. Now I realize if you’re just going to rebalance anyway, then that doesn’t matter so much. But if, like Jack Bogle, one rarely rebalances, then that could make a huge difference. Your thoughts Rob?

[rgarri]

I started lifestradigy growth fund 25 years ago and never regretted it.

[tammimilewski]

Bond Funds don’t do well in an increasing interest rate environment. I prefer treasury bonds for my fixed portion. Plus state tax free in a brokerage taxable account.

[noreenn]

I have a life strategy fund, I prefer that to switching to the ETF funds because I want to put a set amount in automatically each week, easy peasy.

[benjaminjohnson]

I have just 2 ETFS in my ROTH IRA - VTI (90%) and VEA (10%). My time horizon is several years. I am due a modest pension, so I currently do not have any bonds. I may add some short-term bonds once I am in retirement.

[terrybass]

Jack Bogel would say just use.... Vanguard Balance Index Fund

[gregdean]

Thanks for covering this important topic material. You mentioned that you used to allocate to small cap value, which is something that I didn't realize. Even though you don't currently follow small cap value allocations, I'd be interested on your take on what investments you should own for those of us who are making those allocations. I have EFTs for two of the major small cap value indices, my rationale being that there perhaps the definition of small cap value has more subjectivity. Future video suggestion?