3 fund portfolio
- Thread starter 1blkc5
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I did a two fund portfolio with Vanguard, but you could do the same with Fidelity: S&P 500 fund and a Health Care fund. Health care fund did quite well and you can track the S&P 500 results easily.
With Vanguard I do VTI 80% (total US stock market) and VXUS 20% (total international stock market). You'd have to Google the Fidelity equivalent to these funds. This combination provides exposure around the world for large, mid, and small caps.
I don't do bonds because my retirement is still 15-20 years out, but closer to retirement I'll revisit that with an advisor and rebalance if necessary.
I don't do bonds because my retirement is still 15-20 years out, but closer to retirement I'll revisit that with an advisor and rebalance if necessary.
With Fidelity, for example, you could construct a three-fund portfolio using:
Fidelity ZERO Total Market Index Fund (FZROX)[note 5] or Fidelity Total Market Index Fund (FSKAX)
Fidelity ZERO International Index Fund (FZILX)[note 5][note 6] or Fidelity Total International Index Fund (FTIHX)
Fidelity U.S. Bond Index Fund (FXNAX)
see: https://www.bogleheads.org/wiki/Three-fund_portfolio
Some prefer to stay away from the Zero funds, only because they hold fewer stocks than their full cost counterpart. (I have not verified this - but the implication is they are less diversified). Also if you switch brokers, you cannot move the Zero funds in-kind.
Allocation would really depend upon your age.
You could also do ETFs at Fidelity if you prefer Vanguard. Fidelity now has automatic purchases for ETFs, which are really convenient for monthly purchases.
Fidelity ZERO Total Market Index Fund (FZROX)[note 5] or Fidelity Total Market Index Fund (FSKAX)
Fidelity ZERO International Index Fund (FZILX)[note 5][note 6] or Fidelity Total International Index Fund (FTIHX)
Fidelity U.S. Bond Index Fund (FXNAX)
see: https://www.bogleheads.org/wiki/Three-fund_portfolio
Some prefer to stay away from the Zero funds, only because they hold fewer stocks than their full cost counterpart. (I have not verified this - but the implication is they are less diversified). Also if you switch brokers, you cannot move the Zero funds in-kind.
Allocation would really depend upon your age.
You could also do ETFs at Fidelity if you prefer Vanguard. Fidelity now has automatic purchases for ETFs, which are really convenient for monthly purchases.
Two funds?
S&P index fund
Nasdaq index fund
S&P index fund
Nasdaq index fund
What type of account? (Brokerage?) VTI, QQQ, SGOV
I would say it depends on your age and risk tolerance.
in my 401K I'm 75% in Fidelity Growth Pool (mimics the NASDAQ) and 25% in the S&P500 index fund
my IRA's and stock account I'm 100% in FSELX. Pays a significant dividend and averages great returns except the first 6 months of this year...
in my 401K I'm 75% in Fidelity Growth Pool (mimics the NASDAQ) and 25% in the S&P500 index fund
my IRA's and stock account I'm 100% in FSELX. Pays a significant dividend and averages great returns except the first 6 months of this year...
I opened Roth IRAs when our kids turned 18 and funded the first year to get snowball churning.
VOO
VGT
VUG
VTI
These are Vanguard ETFs and Fidelity has something similar.
Fidelity ZERO Total Market Index Fund is a great fund. Set it and forget it for 20 years.
VOO
VGT
VUG
VTI
These are Vanguard ETFs and Fidelity has something similar.
Fidelity ZERO Total Market Index Fund is a great fund. Set it and forget it for 20 years.
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My "growth" fund was TWCUX. I switched to FBGRX which is a comparable Fidelity offering.
I like the 3 fund idea but I think you need to change the funds based on your time until retirement.
It also depends if the assets are in a tax sheltered account. Becuase if you sell and buy to change mix, I believe you will trigger some taxes.
I like the 3 fund idea but I think you need to change the funds based on your time until retirement.
It also depends if the assets are in a tax sheltered account. Becuase if you sell and buy to change mix, I believe you will trigger some taxes.
Yeah - you will pay some taxes…depending on the gains.
Here’s the ugly side of mutual funds outside of a taxable account - you pay for all the capital gains realized in the fund, regardless if the fund made money or lost money during the time you owned it. Not a problem inside a taxable account-advantaged vehicle like a 401(k) or IRA, but a potentially HUGE problem in a regular fund.
E.G. - buy $4,000 of Neuberger-Berman Guardian in October, they post the gains and distributions in November, and your $4,000 worth of shares included a $1,200 capital gains realized, even as the fund lost value.
So, on 31 December, you have a fund worth $3,200 (meaning you lost 20% of the money) and a tax bill on the $1,200, which cost you another $300+ (meaning you had to pay taxes on something that lost money - which hurts in more ways than one).
A mistake I made in 1992 as a young investor.
Taxes matter.
Which is why I recommend an index fund for investments outside those tax-advantaged accounts - low turnover = low realized gains = low taxes.
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I'm 48, so if you can tolerate some down times with the market uncertainty, you will certainly appreciate the up times of the funds I mentioned. Also the FSELX pays a decent dividend / capital gain.
90% of my portfolio is about equally split between QQQ and VOO.
The remaining 10% is allocated about equally to two high yield dividend stocks, Pfizer and Verizon.
I sometimes go all cash when my gut tells me the market is about to drop, and then buy back in at the lower level. I never catch the absolute top or bottom, but am pretty successful at missing parts of the downhill slide.
Sell high and buy low. Unfortunately, most market amateurs do the opposite. They jump on the bandwagon and buy after a security has already gone up. Then, when the same security falls, they panic and sell low.
The remaining 10% is allocated about equally to two high yield dividend stocks, Pfizer and Verizon.
I sometimes go all cash when my gut tells me the market is about to drop, and then buy back in at the lower level. I never catch the absolute top or bottom, but am pretty successful at missing parts of the downhill slide.
Sell high and buy low. Unfortunately, most market amateurs do the opposite. They jump on the bandwagon and buy after a security has already gone up. Then, when the same security falls, they panic and sell low.
How many years have you had QQQ and VOO combo ?
How do you think things will play out over the next year ?
When you'll need that money is more important then your age.
Being 49 and planning to work until 70 is quite a bit different than 49 and retiring at 55.
If you are looking for individual stocks, you should check these out too.
I do agree with VOO & QQQ.
I also haven't seen a down day in BRK-B untill recently, but that should correct itself.
So, these have been some of my best perormers over the years:
LMT
URI
V
MA
(SCCO or TT)
"Past performance is not an indication of future results."
I do agree with VOO & QQQ.
I also haven't seen a down day in BRK-B untill recently, but that should correct itself.
So, these have been some of my best perormers over the years:
LMT
URI
V
MA
(SCCO or TT)
"Past performance is not an indication of future results."
Fselx, focpx, fxaix- allocate to tolerance. I go in thirds and rebalance to target annually. End up buying a lot of FXAIX that way.
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Good post.
We know OP's age. Maybe something of risk tolerance. Nothing of tax status (maybe I missed it) and nothing of account type (cash brokerage, IRA brokerage, etc) (maybe I missed it)
I got into these funds in Sept 2023, went all cash in early Feb 2025 got back in at a lower price in late March 2025. This is in a zero commission IRA at Morgan Stanley.
I was also getting in and out of Tesla, but I have sworn that security off my list as too unpredictable, volatile, and risky. I did make money with it when I had it.
The market hates an unpredictable market. I think the market now accepts that at some point, the on again/off again tariffs are only an administration negotiation tool/tactic, will not be permanent at the highest levels, and by the end of the year the national economy will be on a definite path to growth.
Although environmentalists don't like it, it appears the EPA is changing from a "make it cleaner at any cost" to a "make it cleaner until the cost of making it cleaner exceeds the benefits of it being cleaner".
