The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

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Investing doesn't need to be complicated. In fact, there's a lot of data and analysis showing the most profitable portfolios are the simplest. Taylor Larimore is recognized as a bona fide expert on Jack Bogle's low-cost, buy-and-hold investment strategy. He's substantially grown his own portfolio and shown many others how to do the same based on Bogle's philosophy, and in The Bogleheads' Guide to the Three-Fund Portfolio, he shares the blueprint to his personal approach to index investing approved by Jack himself.

This groundbreaking guide in the Boglehead series offers the most straightforward system for developing an indexed portfolio that will outperform actively-managed ones over time. Through step-by-step explanations, it shows you how to ensure your financial security by investing in the three market index funds--U.S. stocks, non-U.S. stocks, and U.S. bonds. The key to capturing the most return with this strategy lies in allocation, and the guidance inside offers an illuminating depth of coverage on the nuanced ways to balance a portfolio based on your age, income, goals, tolerance for risk, and personal comfort level with volatility.

For people just entering the workforce as well as those closing in on retirement, this single resource ensures a brighter financial future by enabling you to:

• Eliminate a large handful of risks associated with other investing methods, including manager choice, individual stock and sector vulnerabilities, tracking error, and more
• Avoid the most common ways investors lose money trying to make it, including stock picking, market timing, useless newsletters, and expensive advisors
• Prepare yourself to invest real money by hearing from a diverse collection of everyday investors successfully using the approach, including model allocation strategies and tips

Follow the simple path to financial security in The Bogleheads' Guide to the Three-Fund Portfolio.

"Simple. Powerful. And unbeatable. Read it, execute it, then retire in comfort and sleep like a baby."
--William J. Bernstein, bestselling author of The Investor's Manifesto

Discover How Focused Investing Can Lead to Tremendous Financial Growth

The Bogleheads' Guide to the Three-Fund Portfolio shows you how to get better returns than the majority of professional advisors with just three index funds and a buy-and-hold strategy.

Sound too good to be true? Not to the legions of investors who have already amassed fortunes following the philosophy of iconic investor and founder of The Vanguard Group, Jack Bogle. Whether you want to start investing or need better returns, this comprehensive guide walks you step-by-step through determining the proper allocation of your assets, choosing smart investments, and managing your portfolio over time--without losing sleep or money!

In his inspiring Foreword, Jack puts his seal of approval on this powerful and easy-to-use resource, which provides:

• A five-step solution to securing wealth in Bull and Bear Markets
• Actionable plans for capturing more market returns than many professional investors
• Insights and commentary from celebrated and everyday Boglehead investors

Discover the stress-free approach to reaching your financial goals with The Bogleheads' Guide to the Three-Fund Portfolio.

TAYLOR LARIMORE is a sage on the Boglehead forums for everyone who wants to discover "the Boglehead way." Crowned the "King of the Bogleheads" by Jack Bogle, he has spent more than seven decades in finance and investing, in such positions as revenue officer for the IRS, chief of the Financial Division for the Small Business Administration in South Florida, and a director of the Dade County Housing Finance Authority. He is co-author of The Bogleheads' Guide to Investing and The Bogleheads' Guide to Retirement Planning.

Foreword by John C. Bogle xi

Preface: the History of the Bogleheads' Three-fund Portfolio xvii

Acknowledgments xxv

Chapter 1 The Investment Industry 1

Chapter 2 John C. Bogle--The Investor's Best Friend 5

Chapter 3 John Bogle Introduces Three Total Market

Index Funds 9

Chapter 4 Twenty Benefits of Total Market Index Funds (In No Particular Order) 13

Benefit 1: No Advisor Risk 14

Benefit 2: No Asset Bloat 17

Benefit 3: No Index Front Running 19

Benefit 4: No Fund Manager Risk 20

Benefit 5: No Individual Stock Risk 22

Benefit 6: No Overlap 24

Benefit 8: No Style Drift 26

Benefit 9: Low Tracking Error 27

Benefit 10: Above-Average Return 28

Benefit 11: Simplified Contributions and Withdrawals 32

Benefit 12: The Benefit of Consistency 33

Benefit 13: Low Turnover 34

Benefit 14: Low Costs 35

Benefit 15: Maximum Diversification (lower risk) 38

Benefit 16: Portfolio Efficiency (best risk/return ratio) 39

Benefit 17: Low Maintenance 40

Benefit 18: Easy to Rebalance 41

Benefit 19: Tax Efficiency 42

Benefit 20: Simplicity (for investors, caregivers, and heirs) 44

Chapter 5 Getting Started 49

Chapter 6 Stay the Course 59

Appendix I: What Experts S Ay 63

Appendix II: Meet the Bogleheads 69

Glossary of Financial Terms 75

Index 79

Twenty benefits from the three-fund total market index portfolio.

The Bogleheads' Guide to The Three-Fund Portfolio describes the most popular portfolio on the Bogleheads forum. This all-indexed portfolio contains over 15,000 worldwide securities, in just three easily-managed funds, that has outperformed the vast majority of both professional and amateur investors.

If you are a new investor, or an experienced investor who wants to simplify and improve your portfolio, The Bogleheads' Guide to The Three-Fund Portfolio is a short, easy-to-read guide to show you how.