Diversified - Real Simple Using Just Three Funds to Build A Globally Diversified Portfolio WSJ In the 1990s a slew of investment advisers abandoned

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Real Simple: Using Just Three Funds to Build A Globally Diversified Portfolio WSJ, June 15, 2005 In the 1990s, a slew of investment advisers abandoned their market-beating efforts and instead opted for market-tracking index mutual funds. But a funny thing happened on the road to investment humility: Many of these advisers ended up building elaborate portfolios that look nothing like the mainstream markets. Should you imitate the pros? Here's what these advisers are up to -- and why it makes me a little uneasy. Hat trick . Despite the trend toward increasing complexity, all you really need to build a globally diversified index portfolio are three funds: a "total market" index fund that tracks the broad U.S. stock market, a foreign-stock index fund and a bond-index fund. Want a 60% stock-40% bond mix? You might mimic the "simple indexing" portfolio in the accompanying chart. This sample portfolio was built with T. Rowe Price Group funds. But you could put together a similar mix at Fidelity Investments, Charles Schwab Corp. and Vanguard Group. Alternatively, you could buy a trio of Barclays Global Investors' iShares exchange-traded index funds. There's much to recommend the three-fund portfolio. Not only is it simple yet well
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This note was uploaded on 09/27/2009 for the course UGBA 133 taught by Professor Distad during the Summer '08 term at University of California, Berkeley.

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Diversified - Real Simple Using Just Three Funds to Build A Globally Diversified Portfolio WSJ In the 1990s a slew of investment advisers abandoned

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