Discover why a 3-fund portfolio beats 90% of actively managed funds—with less stress, lower fees, and just 15 minutes of work per year.
90%
Of active funds underperform
0.03%
Average expense ratio
15 min
Yearly maintenance
50+ yrs
Proven track record
The Strategy
A 3-fund portfolio is an elegantly simple investment strategy using just three low-cost index funds to achieve broad diversification across the entire global stock and bond markets.Popularized by John Bogle (founder of Vanguard) and the Bogleheads community, this approach has helped millions of investors build wealth without the stress of stock picking, market timing, or paying excessive fees to financial advisors.The beauty lies in its simplicity: by owning "the whole haystack," you're guaranteed to capture the market's returns without trying to find the needle.
U.S. Total Stock Market
~4,000 companies including Apple, Amazon, and every public US company
International Stock Market
~8,000 companies across Europe, Asia, and emerging markets
Total Bond Market
Government & corporate bonds for stability and income
The Evidence
Decades of academic research and real-world results prove that simplicity beats complexity in investing.
Index investing has outperformed 90% of actively managed funds over 15-year periods. The longer your horizon, the better it works.
Own 12,000+ companies across every sector and geography. If one market struggles, others can carry the load.
Pay 0.03-0.10% vs. 1-2% for active funds. That difference compounds to tens of thousands over a lifetime.
Low turnover means fewer taxable events. Keep more of your gains and let compound growth do its magic.
Once a year, spend 15 minutes adjusting your allocations. No daily monitoring, no panic selling, no stress.
Simple strategies are easier to stick with during market downturns. The best portfolio is one you'll actually hold.
Your Blueprint
Your ideal mix depends on your age, risk tolerance, and financial goals. Here's how to find your balance.
The most important decision is your stock/bond split. Stocks offer higher growth potential but more volatility; bonds provide stability and income.
Classic Rule of Thumb:
Bond Allocation = Your Age
A 30-year-old might hold 30% bonds, 70% stocks. But modern guidance often suggests being more aggressive given longer lifespans.
Within your stock allocation, a common approach is 60-80% US stocks and 20-40% international. This captures US market strength while maintaining global diversification.The key insight: Your exact percentages matter less than staying consistent and avoiding emotional decisions during market swings.
Sample Allocations by Life Stage
| PROFILE | STOCK | BONDS |
|---|---|---|
| Aggressive (20s-30s) | 90% | 10% |
| Growth (30s-40s) | 80% | 20% |
| Balanced (40s-50s) | 70% | 30% |
| Moderate (50s-60s) | 60% | 40% |
| Conservative (60s+) | 40-50% | 50-60% |
Tools & Guides
Free resources to help you implement your 3-fund portfolio today.
PDF Guide
Which specific funds should I buy?
Step-by-step instructions for opening accounts, selecting funds, and making your first investment at Vanguard, Fidelity, or Schwab.
Comparison Chart
Fund Equivalents Across Brokerages
Whether you use Vanguard, Fidelity, Schwab, or another broker, find the right funds with our comprehensive comparison chart.
Spreadsheet
Portfolio Rebalancing Calculator
Enter your current holdings and target allocation and our calculator tells you exactly what to buy or sell to get back on track.
Email Course
7-Day Investing Fundamentals
A free email course covering the basics of index investing, asset allocation, and building long-term wealth. One lesson per day.
Common Questions
Which specific funds should I buy?
At Vanguard: VTSAX (US), VTIAX (International), VBTLX (Bonds). Fidelity equivalents: FSKAX, FTIHX, FXNAX. Schwab: SWTSX, SWISX, SWAGX. All have nearly identical performance.
How much money do I need to start?
Many brokers have no minimums for ETFs. Mutual funds typically require $1,000-$3,000 to start. You can begin with whatever you have and add regularly.
Do I need international stocks?
While US stocks have outperformed recently, international diversification reduces risk. US companies already derive ~40% of revenue abroad, but owning international funds provides additional protectio
Should I use ETFs or mutual funds?
Both work great. ETFs trade like stocks and have slightly lower minimums. Mutual funds auto-invest easily and allow partial shares. Pick whichever feels simpler to you.
What about target-date funds?
Target-date funds are essentially automated 3-fund portfolios that adjust over time. They're a great "set it and forget it" option, though with slightly higher fees (0.10-0.15%).
How often should I rebalance?
Once per year is sufficient. Some prefer to rebalance when allocations drift 5%+ from targets. Over-rebalancing can trigger unnecessary taxes and fees.
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Helping everyday investors build wealth through simple, evidence-based strategies. No gimmicks, no sales pitches—just solid financial education.
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This site is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a qualified financial advisor before making investment decisions.