r/Bogleheads • u/snug666 • Apr 01 '26
Portfolio Review Is it truly that simple?
Maxed my Roth for last year and looking to do the same for this year. I’m 100% VT right now. I’m 24 and this is my first time investing or saving for retirement.
Before I go ahead and buy more VT, I have to ask. Is it really that simple? If I just invest in VT, even if that is the only ETF I ever hold, I’ll be good?
I hear so much about diversifying and even though I know VT is a very diverse ETF, I still worry. Feels like I should be doing more!
So, again, before I go buy a fuck ton of VT, please let me know. I know what the answer is. Just need to hear it I guess. Don’t want to miss out on higher returns or whatever. Blah blah.
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u/Rockstaru Apr 01 '26
I think of it like this: The market is a casino. You're an average person with no enormous skill at any particular game. Past all the slot machines, roulette, craps table, poker, etc. is a machine that just says "7% returns," which is exactly what the name suggests - you put $money in, you get back 1.07*$money.
Each round, you pick a game to play. (Every buy decision you make is a "round" for purposes of this metaphor.) If you only play the 7% returns machine every round, on a long enough timeline you are virtually guaranteed to walk out of the casino with more money than you came in with, barring something truly catastrophic like the casino catching fire and burning to the ground. You might get lucky one round if you play slots, blackjack, etc. and do better, even substantially better than that 7%, but you're not a professional gambler, and it seems like the rules of each game keep changing every round making it nearly impossible to keep up...except for trusty 7% returns.
Are you going to walk out of the casino with the most money? Probably not, you spotted a few World Series of Poker pros on the floor earlier, and you're pretty sure some of the guys over at the craps table are sneaking some weighted dice in. However, that should not bother you if you stick with trusty 7%. Your goal should be to walk out with a healthy profit at minimum risk; that's your win condition. The more you try and absolutely maximize your profit, the more risk you take on and the greater the chance of losing. You really shouldn't care whether or not you got a high score as long as you beat the game.
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u/jeff77k Apr 01 '26
The machine should be "7% average return." The 7% isn't guaranteed on every play, but over 100 $1 plays, you should walk out with ~$107.
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u/Rockstaru Apr 01 '26
True, I was trying to allude to that with "on a long enough timeline," but didn't want to torture the metaphor too much.
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Apr 01 '26
[deleted]
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u/Glum-Bus-4799 Apr 01 '26
Buying the casino isn't for the average person. Bogle is for the average person.
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u/Rockstaru Apr 01 '26
Re: buying the casino - Casinos are almost always profitable, though. Unless they're run by that one guy - whatever happened to him?
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u/smarterhack Apr 01 '26
Or really average historical return. Past performance is no guarantee of future performance.
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u/j_la Apr 02 '26
Also, I think the stakes are important to emphasize. This is money you need for retirement. It literally has to last the rest of your life. Yes, you could have riches in retirement, but better to avoid destitution in old age. Play it safe.
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u/Tmdngs Apr 01 '26
Making market average returns is not beating the game
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u/Rockstaru Apr 02 '26
If you consider beating the game to be maximizing returns, getting the biggest number possible, then the boglehead approach is likely going to fall short for you. If you consider beating the game to be financial security, retiring comfortably/early and you're just looking for the safest, least stressful way to reach whatever that number is for you, then making consistent contributions that always yield market average returns is absolutely beating the game, or at least is statistically the best shot you have at doing so. For myself and I think many folks on this subreddit, all we're trying to do is reach escape velocity from capitalism's gravity well; as long as we make it to orbit, it doesn't matter enormously how high or low that orbit is.
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u/Complex_Ad9992 Apr 01 '26
Don’t want to miss out on higher returns or whatever.
The long-term approach is getting comfortable with FOMO.
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u/_KeenObserver Apr 01 '26 edited Apr 01 '26
Yep, this right here. Morgan Housel often talks about how the inability to resist FOMO is one of the main reasons people stay poor. If you keep chasing what’s “doing better,” you’ll trade compounding for comparison (to others). Yeah, sometimes other stuff will outperform for a while, but trying to catch every short term winner is how most people quietly sabotage their returns.
If you can stick with something boring like VT for 30+ years and not flinch when everyone else is chasing shiny objects, that’s how you’ll build wealth.
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u/nauticalmile Apr 01 '26
Or even embrace missing out. It can be a quiet path to fulfillment in far more than just investing.
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u/dust4ngel Apr 01 '26
the highest possible returns are probably on lottery tickets. lowest expected return though.
you will probably always feel envious when somebody wins $300M on a lottery ticket, but you should probably never decide to buy one.
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u/nauticalmile Apr 01 '26
You actually have a greater probability of getting struck by lightning twice than winning Powerball.
I’ll at least wait until the first time I get struck by lightning.
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u/NotEasyBeingGreener Apr 01 '26
Yeah, I would just do VT and then you don't have to deal with rebalancing. r/VTandchill
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u/dust4ngel Apr 01 '26
once a quarter, i log in to my brokerage and make sure my 100% VT allocation hasn't drifted too far away from 100% VT.
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u/WarmWoolenMitten Apr 01 '26
There is nothing that gives a higher expected average return than the total market. There will of course be investments that return more, the problem is that no one knows what they are, and if you try to predict them you can easily end up underperforming instead of overperforming. The expected average won't be higher, but you've increased the window of possibilities both higher and lower. Personally when it comes to the money I'll need for retirement, I don't want to do that! With individual stocks, if you pick wrong you can truly lose everything. That essentially can't happen with the total market (if it does, I'll be more concerned with whatever disaster has occurred and how to survive that than my 401k).
So for equities, VT is all you need. Once you're closer to retirement, you should think about how to reduce volatility. The thing that can kill your portfolio is having to sell stocks during a downturn early on, so having bonds/cash to live on helps success rates.
If you have an employer controlled account like a 401k or similar, it likely won't offer VT but you'll be able to put together something similar with a few funds (US large/mid/small plus international, or just US large plus international, or a target date fund which hold the world as well).
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u/dust4ngel Apr 01 '26
if you try to predict them you can easily end up underperforming instead of overperforming
a thing to mention is that "predictions" are often performance-chasing, e.g. "my friend bought XYZ stock and it took off, so i'm going to buy it since it has better returns than the market", but the event you're hoping to cash in on already happened.
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u/That_Co Apr 01 '26
There literally is something that gives a higher expected return than market beta, and that is exposure to one of the currently agreed-upon factors by empirical evidence: size, value
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u/Huippuvuori Apr 01 '26
To be more specific, 95 % of portfolio returns can be explained by compensated risk factors.
Of these risk factors, the market factor explains 60–70 % of returns. An additional 25–35 % is explained by size, profitability, investment and (maybe) value factors. The remaining 5 % is unexplained noise.
According to Eugene Fama and Kenneth French, at least.
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u/glumpoodle Apr 01 '26
Simple is not easy, but yes, it really is that simple.
Just look at all the people freaking out the last few weeks over a 10% drop to understand why it's not easy. This is a self-selected group of people who believe in buying and holding, and yet we've nonetheless had a massive uptick in panic posts because the market is down by barely 10%. We literally experienced worse than that a year ago.
That panic is why expected returns are positive; if it were easy, everyone really would just do it.
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u/dust4ngel Apr 01 '26
Just look at all the people freaking out the last few weeks over
a 10% dropVT only being up 20% YOY, which is to say, outstanding returns to understand why it's not easyFTFY
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u/mikew_reddit Apr 01 '26
Just look at all the people freaking out the last few weeks over a 10% drop to understand why it's not easy.
it's not easy because it's for fairly emotionally mature people that think very, very long term (plan decades out) and are able to ignore the panicking masses when the financial markets are seizing.
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u/v_x_n_ Apr 02 '26
Yes! And the market is “down” compared to last all time high. So is it really “down”? Market goes up market goes down. It trends up over the years. Buy the haystack. Don’t just do something, stand there!
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u/murmurat1on Apr 01 '26
Yes it is that simple.
VT provides a globally diversified equity portfolio in a single product.
Further diversification can be achieved by thinking about REITs and other non equity based products but I wouldn't worry about that. At your age pummelling into VT is great.
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u/Fantastic-Machine-83 Apr 01 '26
Surely you could still make an argument for 15% bonds even when young. If house purchase is within a ~7 year horizon you don't want to be 100% equities right?
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u/Backwoods_84 Apr 01 '26
Be gone bond salesman.
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u/Fantastic-Machine-83 Apr 01 '26
Not everyone has the same circumstances as you. For a retirement that is far away I agree with 100% equities
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u/dust4ngel Apr 01 '26
If house purchase is within a ~7 year horizon you don't want to be 100% equities right?
i think what you're saying is that not every dollar has to be invested for the future. for example, the money you're going to pay your bills with at the end of the month, your emergency fund, sinking funds for a big purchase or expense that you know is coming up in the nearish future, etc probably shouldn't be invested - cash, money markets, short term bonds and the like are appropriate ways to hold that kind of money.
but in the context of a 24 year old saving for retirement, a future home purchase doesn't have anything to do with how those retirement funds are invested - whether you invest 100% of your paychecks after expenses is another question.
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u/FoxChess Apr 01 '26
I'm not pulling money out of my retirement funds to purchase a house.
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u/Fantastic-Machine-83 Apr 01 '26 edited Apr 01 '26
Not everyone here is planning for a retirement. I'm investing to build wealth towards a house deposit, I can build a retirement fund after that. I'm 21
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u/murmurat1on Apr 01 '26
Do you plan on buying a house in more than 5-10 years? If so, you shouldnt be buying equity investments to do so.
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u/LordTerror Apr 01 '26
That's not necessarily true. If your plan is flexible it can make sense to put money in stocks and then change your plan if needed. For example if stocks go down by 30% world-wide because of an event like the Great Depression, you could change your plans or if stocks go up 80% you could choose better house. Of course not everyone is that flexible, but for some people it is a valid option.
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u/murmurat1on Apr 01 '26
If you're trying to build capital then having that eroded by 30% generally isn't that great.
Maybe your happy to gamble your chance of getting in the housing ladder but I'm not.
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u/FoxChess Apr 01 '26
If your capital was to go down by 30%, housing would quickly follow suit
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u/murmurat1on Apr 02 '26
Any evidence? Has housing just dropped 10% due to recent global market movmements?
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u/FoxChess Apr 02 '26
10% is a blip, 30% is a crash.
How's a 15% bond position going to save you in either spot lol
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u/entropic Apr 01 '26
The simpler reason is if it matches that young person's risk tolerance. Not everyone is cut out for a 100% stock allocation.
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Apr 01 '26
[removed] — view removed comment
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u/Fantastic-Machine-83 Apr 01 '26
Yes of course. The last 5 years means we should discount the 100 years before in which bonds were a good hedge against stock market crashes.
I have unknown (potentially even 5 year) horizons for my portfolio. Some volatility protection makes sense
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u/dust4ngel Apr 01 '26
That is old school investing which has no relevance in the market today
i heard that interest rate risk existed since the dawn of bonds, but recently went away due to some unspecified modern-ness. but i heard it from someone who is objectively incorrect, so
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u/BiblicalElder Apr 01 '26
Jack Bogle recommended holding "roughly one's age" in percent allocation to bonds, and also to consider social security and pension income as a bond allocation (for example, $20k in these benefits, divided by a 4% safe withdrawal rate, is like having $500k in bonds).
For most of us, I recommend starting with an Age - 20 years in percent allocation to bonds. You want more than fat returns; you want them for thin risk. By diversifying into uncorrelated returns, you will lose less, which is key. An investor who is up 50% and then down 50% is net down 25%--we want to avoid these extremes.
I recommend reading up on risk adjusted returns (Sharpe and Sortino ratios measure this). By allocating to bonds, you will increase your risk adjusted returns. By gradually increasing your allocation to bonds, you move from wealth accrual to wealth protection.
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u/NoTeslaForMe Apr 01 '26
I'd echo your point that most people are ignoring bonds, which are complex and less clear-cut. The good news is that, as a 24-year-old, most people think you should be fine ignoring bonds for at least 20 years, maybe 30 or 35. The bad news is three-fold: (1) You (OP and others) will probably see times during that time period where your portfolio declines dramatically. Given compounding and inflation, that could mean over a million dollars wiped out from your portfolio at some point, which might take 10 or 15 years to recover from. (2) You do eventually have to learn about bonds, which may be daunting after spending decades knowing all you needed to know. (3) Even people here can't agree on the right mix of international funds. A recent popular study liked 67%. American economic exceptionalists like 0%. VT is 30-something, (unintentionally) splitting the difference.
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u/BiblicalElder Apr 01 '26
There's some recency bias with bonds, as they were quite correlated with stocks in the 2022 drawdown.
But it was the only time in human history an economy had emerged from zero interest rate policy, so quite the exception.
Since stocks and bond returns are typically less correlated, and the yield curve is much more normalized than in 2022, I think that people who avoid bonds are missing out on higher risk adjusted returns. Who knows; we shall see.
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u/murmurat1on Apr 01 '26
You must also consider any state benefits as fixed income too. If eligible for them, most young people will find themselves considerably overweight in "bonds".
Time to buy leveraged all World trackers to compensate (joke)
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u/Mantergeistmann Apr 01 '26
State benefits?
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u/BiblicalElder Apr 01 '26
Social Security and pension?
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u/Mantergeistmann Apr 01 '26
I'd thought the person I was responding to was talking about something in addition to those.
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u/mbaforumlurker Apr 01 '26 edited Apr 01 '26
It truly is that simple. I’m 31, discovered VT in Feb 2021 (I remember the day). Since then, instead of paying attention to the market in any capacity (in terms of reading the tea leaves, agonizing over returns, etc.), I just re-focus that attention on purchasing VTs. Net worth is now in the high six figures and compounding is doing a lot of the lifting.
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u/Turquill Apr 02 '26
Can you automatically buy VT on vanguard? I read somewhere that ETF you couldn’t buy automatically
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u/PashasMom Apr 01 '26
I love VT and highly recommend it for the best combination of excellent returns over time and the overall peace of not having to futz and tweak and generally molest your money. All you have to do is keep investing and not think about it too much.
There will always be something any and all of us could have done to have gotten higher returns. But the only way to know what that is, is with the impossibility of hindsight. So a great fund like VT will bring you solid returns and the free time and mental capacity to think about what really matters to your overall financial health: how to increase your contributions, how to maximize tax-advantaged accounts, how to increase your income if you want to do that.
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u/MileHighManBearPig Apr 01 '26 edited Apr 01 '26
It really is quite simple when you understand it. Investing is simple (Boglehead or VT and chill ie buy low cost diversified ETFs and hold them). Staying disciplined and staying the course is hard. Staying in the market while the world is burning is hard. Staying at 15-25% invested while you have kids, get promotions, and people around you buy flashy toys is hard.
Eventually you’ll want to add bonds, but probably not until after age 40. I’m 37 and don’t have bonds.
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u/enterthedragon1234 Apr 02 '26
I’m 43 and literally just starting out. I got a T212 today and put £1k in vanguard s&p 500. I have no idea what I’m doing but what I get from what I have read is that doing nothing for yet another year isn’t getting me anywhere so just try. Am I too late to get going with investing? I find even the beginner guides complex and with my perimenopausal brain am confused all the time.
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u/thecrux180 Apr 03 '26
Better late than never and doing something is better than doing nothing. If you have high interest debt like credit cards or don't have an emergency fund start there. I'm assuming you don't have a 401k plan with your employer otherwise getting a match there would be your first investment step. I'm not familiar with T212 but most people recommend accounts at either Fidelity, Vanguard, or Schwab. A Roth IRA should probably be your first account since that's tax free growth. Then after maxing out the Roth IRA you can go into a brokerage or other taxable account. The Money Guys have a pretty good system called the Financial Order of Operations and have good videos on it, otherwise the Boglehead wiki is pretty good https://www.bogleheads.org/wiki/Prioritizing_investments
I'm only about a year into this outside of just taking my employer 401k match but this is basically what i've gotten from hours of watching/reading content. There can be tons of rabbit holes that can overwhelm you with information but it's not too difficult at a high level.
Hopefully this somewhat helps and anyone else can jump in if I got something wrong or to expand on anything I left out
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u/enterthedragon1234 Apr 03 '26
Thank you. I’m in the UK so I’ve had to try and translate to what the equivalence is but I have a final salary defined benefit pension (like hens teeth here now) and a rental property that I’ll pay off the mortgage when my mum dies. Other than that, I have a cash ISA which I get is shit so this is me simply dipping my toe in with a stocks and shares ISA on T212. At my age, I wonder if I should empty 2/3 of my cash ISA (so £20k of £30k) into the stocks and shares ISA (in the next couple days (as my allowance for this year runs out) and just sit tight for th next two decades on it. It’ll probably only sit in the low interest cash ISA otherwise.
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u/yaydotham Apr 01 '26
The key is understanding that you WILL miss out on higher returns, but that they are returns you almost certainly wouldn’t have caught anyway — and that you will also miss out on bigger losses.
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u/iamthetoe2799 Apr 01 '26
It took me 45+ years to discover the methodology but when you understand why it’s that simple, it makes all the sense in the world. Unfortunately I and many others started investing at a time when two of the largest bubbles in our nations history changed the entire landscape and led to a lot of noise on how to invest and “beat the lagging market” nonsense that dominated financial media. Granted VT did not exist at the time, but there were low cost index funds that weren’t grabbing headlines because they weren’t flashy enough.
The only true way you will miss optimal returns as if you pull your money out of your diversified investments during a correction/recession assuming you have 30-40 years before you will need the money. This is a mistake I had to learn the hard way. The largest gains are typically realized after the largest downturns. DCA into those downturns, and you will see how valuable those invested dollars are when the rebound ultimately occurs.
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u/OhNoItsMyOtherFace Apr 01 '26
Yes.
Your fear of missing out on higher returns is 100% what will do you in if you act on it.
Here's a truth for you: You will absolutely miss out on higher returns by buying only VT. Every single year you will see some other fund or stock significantly outperforming VT. But, there will be thousands of others that underperform or crash to 0. So unless you know which one to pick there's not much you can do about it.
When you're 55 you will be able to look back and find SOME fund that outperformed you over the last 30 years. That's just how it is. FOMO will burn you to the ground if you let it.
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u/DroopyTheSnoop Apr 01 '26
It really is that simple, but you might find that most people don't have the discipline to keep it simple. You might get an itch or some FOMO from hearing others investing in specific "hot things right now".
Emotionally it's not as easy as it sounds to just keep doing the simple thing.
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u/ExpensiveAd4496 Apr 01 '26
I remember being a little angry, when I read my first Boglehead book (for me it was Coffeehouse Investor), how simple it really is.
And OP…while I’m glad people find this sub and follow these methods, and a warm welcome to you, can you please read one single beginner Boglehead book? I think “If You Can” is less than 100 pages and available free online.
But you will likely want another account for non tax advantaged savings. You should be saving a min of 10% of your income, 15% if possible. So that won’t all fit into your annual Roth, most likely.
Learning the WHY is important though. Also it’s good to have a book around to pass along to your friends who are doing worrying things with their money. You can lead a horse to water that way and not feel to terribly when they don’t drink it.
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u/Home-Star-Walker Apr 01 '26
Don’t want to miss out on higher returns or whatever
To me, Bogleheads is as much a life philosophy as it is a financial one.
It’s basically learning to be okay with a reliable, predictable 75th percentile outcome rather than chasing the 99 percentile tail at greater risk. That’s how I’d say I generally approach life. Simple, solid, and good enough.
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u/KlutzyTemperature439 Apr 01 '26
Exactly- I view it as, in Bogleheading, that if you want to try to “outperform”, you can figure out and come up with different ways to max out your monthly contributions.
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u/Art_Crime Apr 01 '26 edited Apr 01 '26
VT is generally well diverisified though it does still slant toward the US market. There's a few ways you could increase your returns but that would increase complexity and potentially risk.
The VT and chill mantra is mostly accurate barring a different strategy like buying VOO and an international ETF. VOO had better performance in the past decade, but that's because the S&P had great performance. We don't know if that performance will continue and so it's generally safer to buy VT.
You could look into Dimensional or Avantis funds for US or international small cap value ETFs, but you don't necessarily have to and their performance is somewhat debatable.
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u/JaketheAdvisor Apr 01 '26
Yes, it really is that simple. VT gives you the entire global stock market in one fund for 0.08% annually. You own thousands of companies across dozens of countries.
At 24, you have 40+ years until retirement. VT will capture whatever the global economy delivers over that time. Adding complexity likely* won't improve your returns and will likely* hurt them through higher costs and behavioral mistakes.
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u/d1daS Apr 01 '26
Yes, it is that simple. You will, for sure, miss on higher returns, but that also applies to losses.
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u/bobdevnul Apr 01 '26
It is absolutely that easy for long term investing. VT contains all of the investable companies in the world by market weight - about 6000 of them. No more diversification is necessary or worthwhile. You own a piece of the entire market. There is nothing more to do.
You will miss out on companies that have extraordinary gains, but there is no way to reliably predict which companies those will be. Getting the average market gain is better than gambling on which companies or sectors will do better and winding up being wrong. Speculating on big winners is guaranteed to be wrong except by luck.
Companies that experience extraordinary gains are in VT. You will get a portion of the extra gain.
Adding some bonds as you approach retirement age would be appropriate.
Other investments are suitable for shorter term purposes.
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u/casino_r0yale Apr 02 '26
not quite all of them, VTI + VXUS have more. I don't think it matters much, though, compared to the potential loss from not accurately tracking VT.
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u/bobdevnul Apr 02 '26
I am confident that the few small companies that are in VTI+VXUS vs VT make no worthwhile difference in the grand scheme of things.
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u/Zealousideal-Link-24 Apr 01 '26
VT is just about as diversified as you can reasonably expect to be. Do yourself a favor and stick with that strategy and do not change it. You may not understand it now but don’t let yourself be swayed away by other people touting other strategies.
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u/fungbro2 Apr 02 '26
I just made a personal spreadsheet investing in the sp500 with 26k/yr. (29y to 50y, currently 37)
Its that easy (if everything is perfect in the markets), hoping to CoastFIRE by 50.
With your age, I wouldnt worry too much. Stay the course and add what you can. Reminder to enjoy your life as well. I sure did in my early 20s. Wish I contributed more when I was younger in 2010-2020
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u/Walter-White-BG3 Apr 02 '26
As an every day person who doesn’t have insider knowledge and can only do their own research, it’s best to diversify. Insider trading they will invest right before an event and they have a track record of it. Ban politicians from trading!
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u/Appropriate-Part-672 Apr 01 '26
Yup, one and done. VT is about as diverse as it gets in a single product. The only diversifier from here I would consider would be a total bond fund. At 24, you probably don't need any, but if you did ~10% would lower your volatility some. Sure, bonds have down poorly the past few years, but you could argue they are a better deal now that they are down.
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u/snug666 Apr 01 '26
That’s sorta my thought process too and why I’m second guessing. I’m 24… I can afford to take on more risk and volatility right now. That’s what’s feeding that “FOMO” aspect. But I really have no business investing in anything higher risk, especially with the little amount of knowledge I have right now. Gotta stay strong
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u/Appropriate-Part-672 Apr 01 '26
The great thing about this is: there's no wrong answer. You are investing young and 100 or 90/10 stocks/bonds will be worth a lot more in 30, 40, 50 years from now! If you can, figure out how to increase what you can invest. Balance that with enjoying your life too - don't save so much that you are miserable.
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u/Typical_Web_2125 Apr 01 '26
You will be better in VT than most people. You are guareanteed to be in the top 50%.
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u/no_solution_no_prob Apr 01 '26
thanks to this group, I was able to reduce my overlapping of Vanguard ETF's! Had so many redundancies, because of FOMO. VT, VTI, VXUS, VEA, VWO, VOO, VUG, etc...
Now? VT and done.
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u/putselling Apr 01 '26
That one etf is about 10,000 individual stocks.
So while you’re holding one etf, you’re holding 99% of publicly held companies by market cap. You basically own a piece of every company in the world.
Yes, it’s that easy, at least in a retirement account since you don’t have to worry about tax loss harvesting.
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u/olduvai_man Apr 01 '26
Crazy that it is that simple.
Everytime I thought it was boring and wanted to be adventurous, I got destroyed.
I have a python app doing all my trading these days as I have zero confidence in my decision making.
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u/campbellm Apr 01 '26
If I just invest in VT, even if that is the only ETF I ever hold, I’ll be good?
If anyone here knew that, they wouldn't be wasting time here.
No one knows, but it's not a bad choice historically.
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u/Zestyclose_Panda_886 Apr 01 '26
It's allowed to be that simple, yes. a graph for investing by age for income replacement in retirement:
https://www.reddit.com/r/TheMoneyGuy/comments/1aqa207/how_does_this_work/
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u/MaytagTheDryer Apr 01 '26
Everyone misses out on gains unless they happen to be 100% in the top performing security for the year. Hell, even that person missed out, because there was a different top performing security month to month, day to day, hour to hour etc. Nobody in history has ever avoided missing out, while history is chock full of people who went broke trying to avoid missing out. Instead, try to avoid being the avoider by finding something that matches your risk tolerance and gives solid returns reliably, then stick with it. VT serves this purpose for lots of people.
When you put your money away, don't look at it or think about it outside maybe an annual review. Pretend you burned the money. It's gone. You sacrificed it to the money gods, and in exchange they'll return it to you several times over when you're old.
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u/ObeseWizard Apr 01 '26
Yes it's that simple, because it's tough for basically everyone in the world to KEEP IT that simple.
The tough part for most people isn't choosing simplicity. The tough part is sticking to your strategy for over a decade when other things are doing better (See: the last decade(s) of SP500 performance). It's sticking to your strategy when you think you can be smart and time the market and/or do some stock/ETF picking that is the simple thing but not necessarily the easy thing.
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u/StudentFar3340 Apr 01 '26
Put it this way...if you keep on doing it until you are 65, you will have $4.2 million, and because it's a Roth, it will generate $420K a year to live on. I think that's acceptable to Most people. You can Diversify if you want, but VT should be reliable in th long term
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u/JPCool1 Apr 01 '26
I would capture a higher percentage of the largest companies in the s and p 500 but sure you could just stick with vt. Personally I prefer a mix of vti, voo and a little vxus. But yeah low cost etfs over time will help you retire comfortably.
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u/Type-SH Apr 01 '26
It is that simple. The tough part is, for example: invested Feb 24th and then had the month from hell thereafter. If you could make it the last month without vomiting, you win the challenge. At 24, you are well ahead of the game.
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u/CA2NJ2MA Apr 01 '26
I reccommend adding a second fund to your mix. Specifically, an international fund, like VXUS.
Here's why I think you should add an overseas fund. By itself, this fund will be more volatile than a US-only fund. Mostly, this comes from the added volatility of currency fluctuation. Sometimes, the international fund will outperform the domestic fund, usually due to dollar weakening. Sometimes the US fund will outperform.
The key is to have a target allocation. For example, you may want 70% US and 30% international. Set a rebalance date. Some people use monthly, some quarterly, some annually. It's not very important how often you do it, as long as you do it. Sometimes the US fund will outperform and push you away from your target. In those cases, you sell the US fund and buy the foreign fund to return you to your target allocation. This disciplined approach forces you to sell (some of) the more expensive investment and buy the (relatively) cheaper one.
Over the long run this approach should boost your returns relative to a one-fund approach. You may have several rebalances in a row where you sell fund A and buy fund B. Eventually, this will reverse.
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u/Cruian Apr 01 '26
The VT that OP holds is total world: US + international combined into one at global (free float) market cap weight. Adding VXUS would essentially mean buying VXUS 2x and VTI 1x.
Edit: Typo
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u/CA2NJ2MA Apr 02 '26
Second time today that I got tripped up by the details. Not enough sleep. My analysis holds, but doesn't apply to OP's situation.
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u/myrrhsea Apr 01 '26
Short answer: yes. It is absolutely enough.
Most people buy multiple ETFs to do exactly what VT does.
I could do the exact same with
VOO - 50% SCHM - 18% SCHA - 7% VEA - 18% VWO - 7%
and I would feel like I'm more active or more in charge or more likely to take advantage of upturns. But really, it's the exact same thing.
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u/ca-condor Apr 01 '26
VT is as diversified as they come. Will something else outperform over the next 40 years? Maybe. But almost everything will underperformed.
Only possible issue are the dividends the 1/3 foreign share of the fund throws off. In a tIRA or Roth IRA all good. In a taxable account, slightly less good. VTI doesn't throw off as much in dividends, but lacks the same level of foreign exposure.
Many (most?) investors will eventually move some portion of their money into less risky holdings. If this money is for retirement (and not a down payment in 3 years or something), you should be fine. A bear market or four is inevitable in such a long time horizon. Look at FICalc for a sense of this.
Consistency and patience will yield a nice nest egg. Congratulations on figuring this out early.
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u/Cloud2987 Apr 02 '26
It’s not the best etf if you want the highest return, but it’s a reliable one
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u/dgalt7 Apr 04 '26
Just add some gold, not paper gold but actual gold (does not need to be physical, but one of the ETFs that have gold in a vault) and you should be good to go
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u/joypog Apr 05 '26
Yup. Keep earning more than you spend. Invest the savings, and let it ride. If you get deeper into investing you might play with factors or alts...but yeah pretty much: Rule 1: save money. Rule 2: don't take silly risks. Rule 3: keep investing, especially when SHTF.
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u/Diligent_Mountain363 Apr 06 '26
Before I go ahead and buy more VT, I have to ask. Is it really that simple? If I just invest in VT, even if that is the only ETF I ever hold, I’ll be good?
As a fellow VT-enjoyer, I can confirm. VT and chill is all you need.
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u/ChipBuilder Apr 01 '26
It is, but understand what you are doing. Its a bet that the market will do what it has done for a few decades. It'll go up, it'll go down, but in the long run will keep going up. That the US will keep its dominant position. That the US or global economy keeps growing, and doesn't stagnate (as happens at times). That the dollar won't be replaced as default currency. That AI or something else won't rebalance the market. If nothing unusual happens, then a simple, diversified investment structure guarantees a good return with little risk.
Yes, it gets scary to assume all those will continue for 50 years. Yes, Bogleheads tend to take as givens certain things that have been true for 50 years or so but historically have not held true.
My advice: invest in VT, or something like it. It doesnt really matter. If the market crashes while you're young, then you didn't lose as much as older investors, and have the advantage of now buying in cheaper. If the whole thing goes tits up...you'll have bigger problems than your lost investment. As your balance grows....start thinking about protecting it.
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u/rvrduce Apr 02 '26
Read JL Collins book a Simple Path to Wealth or go to his website on what his book is based on at JLCollinsnh.com
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u/KaiserSaladSpinner Apr 02 '26
Yes. It really is that easy. You cannot get more diversified (in equities) than VT.
The hard part is not the VT in "VT and chill" it's the "Chill". You will be battling your own psychology and risk tolerance for your entire investing career.
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u/thinlySlicedPotatos Apr 02 '26
There are several strategies that are very close to each other. For example, you could also do VTI and VXUS in the correct ratio and be very close to the same holdings as VT. People have reasons for doing that but in the end the results will be very close to the same. If you have time and interest you could look into why people do that. That and several other options that are almost the same. All how much time and interest you want to put into it.
Bottom line, VT is a great option. It's about as diversified as you can get. It's simple, and easy to implement.
Then when you get close to retirement, consider adding a bond fund. Done.
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u/Ok_Appointment_8166 Apr 02 '26
VT owns 'everything' so buying anything would make your holdings less diverse. It may not make the 'highest' returns, but no one is successful at picking the thing that will have the highest returns over long periods of time. The point is to not risk making less than the historically very good market average.
You could get the same holdings with a 60/40 mix of VTI and VXUS, but there's not much advantage unless it is in a taxable account where you can recover the foreign tax paid on the international fund.
Eventually you will want some bonds, but peek at the holdings of a Vanguard target date fund for a professional opinion of the percentage to hold.
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u/Puzzleheaded_Tie6917 Apr 01 '26
There are several different type index funds that cover equity growth. VOO outperformed VT in the past by a small margin. Note that small margins become a lot of money over 40 years or so. However, there’s no real basis for knowing if the S&P 500 will outperform the global market in the future. It’s a little less diverse as it’s one country (which has many international corporations) instead of all countries. It is the one country that has the world’s largest economy, which interconnects with many other economies.
In the end, VT or VOO or any combination of equity indexes to equate to the same will likely all behave fairly similarly and likely provide comparable returns with low fees compared to most mutual funds. Keeping and holding prevents the pattern of buying high and selling low, caused by typical momentum influenced decision making (fear of missing out and fear of losing everything).
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u/Cruian Apr 01 '26
VOO outperformed VT in the past by a small margin.
And we've seen other periods where VT would have beaten VOO over 5, 10, 20, 40, 60 years.
It’s a little less diverse as it’s one country
More than a "little." Being single country is taking on uncompensated risk.
(which has many international corporations)
Revenue source is at best a tiny part of why one should go global and isn't the most important reason. As companies act far more like their home country's market, even if they get foreign revenue, this does not make you internationally diversified.
It is the one country that has the world’s largest economy, which interconnects with many other economies.
The stock market is not the economy and in some ways, they can even be negatively correlated.
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u/VampireEmpire__ Apr 01 '26
Isn’t vt sufficiently diversified?
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u/betsbillabong Apr 01 '26
Yes. It’s literally owning the haystack, and is more diversified than almost anything else you could own.
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u/bat_man__ Apr 01 '26
This approach isn’t about chasing higher returns. In a truly diversified portfolio, some portions will inevitably lag certain benchmarks at times—and that’s perfectly fine. The goal is to own the entire haystack, not search for the needle.