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    The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk
    The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk
    The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk
    Ebook179 pages1 hour

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

    By Taylor Larimore and John C. Bogle

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    About this ebook

    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.

    LanguageEnglish
    PublisherWiley
    Release dateJun 1, 2018
    ISBN9781119487357

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    • 5/5
      Very short and very sweet. Well written with a ton of evidence to follow him up. I do believe that individual stocks can beat the market but I am early on in my career. I will put at least 20% of my starting profile to the 3 Vanguard ETF's (instead of the mutual funds)

    Book preview

    The Bogleheads' Guide to the Three-Fund Portfolio - Taylor Larimore

    Praise for The Bogleheads’ Guide to the Three-Fund Portfolio

    Forget picking individual stocks. Stop hunting for star money managers. Don’t bother guessing the market’s direction. All this is nonsense that’ll enrich Wall Street at your expense. Instead, listen to Taylor Larimore, buy three total market index funds—and put yourself on the far surer road to financial success.

    —Jonathan Clements, founder of HumbleDollar.com and author of From Here to Financial Happiness

    The vast majority of investment products and services are overwrought and cost too much, but the Bogleheads are here to say that it doesn’t have to be that way. In this single, easy-to-digest volume, lead Boglehead Taylor Larimore shares how three low-cost mutual funds are all you really need for a successful investing life, whether you’re just starting out or have been a serious investor for years. ‘The majesty of simplicity’ have long been Taylor’s watchwords; this book is the embodiment of those virtues.

    —Christine Benz, senior columnist, Morningstar, Inc., and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances

    Usually if it’s too good to be true, it is. Taylor’s investment strategy is an exception to the rule. Most investors will be far better off if they follow Taylor’s simple, yet sophisticated strategy. It will have a profound impact on their lives.

    —George U. Gus Sauter, Chief Investment Officer, Vanguard (retired)

    The

    Bogleheads’

    Guide to the Three-Fund Portfolio

    How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

    Taylor Larimore

    Wiley Logo

    Cover images: left to right: © FrankRamspott/Getty Images; © LEOcrafts/Getty Images;

    © FrankRamspott/Getty Images

    Cover design: Wiley

    Copyright © 2018 by Taylor Larimore. All rights reserved. All rights reserved.

    Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

    Published simultaneously in Canada.

    No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions.

    Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

    For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993, or fax (317) 572-4002.

    Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

    Library of Congress Cataloging-in-Publication Data:

    Names: Larimore, Taylor, 1924– author.

    Title: The Bogleheads’ guide to the three-fund portfolio : how a simple

    portfolio of three total market index funds outperforms most investors

    with less risk / by Taylor Larimore.

    Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Includes

    index. |

    Identifiers: LCCN 2018009787 (print) | LCCN 2018011286 (ebook) | ISBN

    978-1-119-48737-1 (pdf) | ISBN 978-1-119-48735-7 (epub) | ISBN 978-1-119-48733-3

    (cloth)

    Subjects: LCSH: Investments. | Portfolio management. | Bogle, John C.

    Classification: LCC HG4521 (ebook) | LCC HG4521 .L3195 2018 (print) | DDC

    332.63/27–dc23

    LC record available at https://lccn.loc.gov/2018009787

    To Patricia Steckman Larimore, my beloved wife during our 62 years together,

    and

    Taffy Gould, who now shares my golden years with me,

    and

    John C. Bogle, who created the three total market index funds

    that made The Three-Fund Portfolio possible

    The author is donating all royalties to The John C. Bogle Center for Financial Literacy

    Contents

    Praise for The Bogleheads’ Guide to the Three-Fund Portfolio

    Foreword

    The Three-Fund Portfolio

    A Word about Non-U.S. Stocks

    A Good Book by a Wise Author

    A Power Seen from Afar

    Preface: The History of the Bogleheads’ Three-Fund Portfolio

    Acknowledgments

    CHAPTER ONE: The Investment Industry

    CHAPTER TWO: John C. Bogle—The Investor’s Best Friend

    CHAPTER THREE: John Bogle Introduces Three Total Market Index Funds

    CHAPTER FOUR: Twenty Benefits of Total Market Index Funds (in no particular order)

    Benefit 1: No Advisor Risk

    Benefit 2: No Asset Bloat

    Benefit 3: No Index Front Running

    Benefit 4: No Fund Manager Risk

    Benefit 5: No Individual Stock Risk

    Benefit 6: No Overlap

    Benefit 7: No Sector Risk

    Benefit 8: No Style Drift

    Benefit 9: Low Tracking Error

    Benefit 10: Above-Average Return

    Benefit 11: Simplified Contributions and Withdrawals

    Benefit 12: The Benefit of Consistency

    Benefit 13: Low Turnover

    Benefit 14: Low Costs

    Benefit 15: Maximum Diversification (Lower Risk)

    Benefit 16: Portfolio Efficiency (Best Risk/Return Ratio)

    Benefit 17: Low Maintenance

    Benefit 18: Easy to Rebalance

    Benefit 19: Tax Efficiency

    Benefit 20: Simplicity (for Investors, Caregivers, and Heirs)

    CHAPTER FIVE: Getting Started

    CHAPTER SIX: Stay the Course

    Appendix I: What Experts Say

    Appendix II: Meet the Bogleheads Mel Lindauer, President, The John C. Bogle Center for Financial Literacy

    Early History

    Boglehead Conferences

    The Big Move

    Forum Statistics

    Local Chapters

    Wiki

    Bogleheads Books

    The John C. Bogle Center for Financial Literacy

    Glossary of Financial Terms

    Index

    EULA

    Foreword

    There is something truly remarkable about the intersection of something old and something new. First, a World War II veteran of the Battle of the Bulge has an idea for building a better world for investors. A decade later, modern technology begins to create unprecedented opportunities for the development of social networks, opening a whole new world for interpersonal communication. That combination of man and technology led to the creation of an investor-driven website for individual investors.

    The Army combat veteran, born in 1924, is Taylor Larimore, distinguished citizen of Miami, Florida, and a truly wonderful human being. The new technology is the Internet. The idea: to allow investors in the Vanguard mutual funds to share their ideas, their investment experiences, and their financial strategies with one another, as it is said, without fear or favor.

    Founded by Taylor in 1998 as the Vanguard Diehards, the name of the new website was changed to the Bogleheads in 2007. Their first meeting—Diehards I—took place in March 2000, when I joined some 20 Vanguard investors in Taylor’s Miami condominium for dinner, friendship, and lively conversation about investment strategy and policy.

    Then to Vanguard’s home in Valley Forge, Pennsylvania, on June 8, 2001, with 40 Bogleheads in attendance. Then to Chicago, where Morningstar hosted the three-day gathering for 50 dedicated investors. Next, to Denver and the Chartered Financial Analysts Conference in 2004, with 90 Bogleheads in attendance.

    On to San Diego 2008, and to Fort Worth in 2009, before settling down to roost each year thereafter at a mid-size hotel

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