A 3 Fund Portfolio: The Simple Way To Invest

Investing can be quite hard. It takes time, patience, and the right mindset to pick and choose what investments to go with. The easy solution is to hire someone else to do it for you. What if I had a simple way for you to invest?  All it takes is creating a 3 Fund portfolio. 

Often considered a lazy portfolio, but a 3 Fund Portfolio may be all you need to create great wealth. Let’s look at it from a pragmatic perspective. Most people do not have the time, patience, or the want to study many different investment vehicles to create a portfolio.

5

5

What is the 3 Fund Portfolio?

Lined Circle

As the name says, a 3 Fund Portfolio has just three funds. It is as simple as picking three things and never having to worry about them.

Now a fund can be any mutual fund or index fund. You can even use ETFs to create this 3 Fund Portfolio of yours. Typically, a 3 Fund Portfolio consists of: - U.S. Stocks - U.S. Bonds - International Stocks

What is the 3 Fund Portfolio?

The 3 Fund Portfolio got popularized by a group of people called Bogleheads. This group of people is followers of John Bogle, the creator of Vanguard. John Bogle is the man that created the first index fund in 1976 and created a revolution in the finance industry for making mutual funds cheap that matched the overall market. 

5

Lined Circle

What Are the Advantages of a 3 Fund Portfolio? 1. Diversification With this amount of companies and bonds, the diversification of this portfolio is enormous. If one company fails, it may not wreck your whole portfolio because you have invested in over 10,000 different companies. 

Lined Circle

2. The Price of Investing:

Keeping things simple also helps to reduce the price of investing. If you hire someone or have a massive portfolio of different funds with huge expense ratios, it will cost you lots of money.

Swipe Up to read more about A 3 Fund Portfolio

For More Posts Like This Visit The Frugal Expat