Investing doesn’t have to be difficult – and it shouldn’t be! Here are three super-simple portfolio options for do-it-yourself investors to consider. None of these portfolios use more than three funds. How is that for simple?

3 Super-Simple DIY Investing Portfolios

Investing Is For Everyone

Steadily investing money into the stock market is one of the best ways to grow wealth over an extended period of time. Investing isn’t just for the wealthy though. It’s for anyone who wants to grow wealth – regardless of their starting point.

Even someone who doesn’t know anything about investing can easily get started. If you have no interest in the day-to-day tasks that come with managing investments, consider contacting a unbiased financial planner to help out.

Everyone should know this: The magic math behind consistent investing
What is the best way to invest small amounts of money?

DIY Investing Isn’t For Everyone

While managing your own investments isn’t hard, there are things you need to know and consider. Improperly managed investment accounts is why investor returns lag investment returns. Some studies have shown investors underperforming the market by a minimum of 2% – some as high as 7%!

If you are going to manage your own investments take time to understand:

  • how to build a portfolio that aligns with your goals and risk tolerance;
  • the best way to fund the investment account;
  • when to rebalance the account and how;
  • tax implications of holding then selling certain types of investments

DIY investing isn’t overly complicated, but having some base knowledge and a plan in place can increase an investor’s success.

There are also potential fee concerns depending on the investing platform used. If you’re going to be investing small amounts of money regularly you should look into either free-trade ETFs or one of the low-cost automated platforms.

5 Reasons Your Investments Are Performing Below Average
Here is portfolio diversification in action

Here are three simple DIY portfolios for consideration…

Simple DIY Portfolios

Simple Portfolio Option #1

Have you heard of Warren Buffett? He’s the guy who is involved in a million-dollar bet that the S&P 500 Index will outperform a professional actively managed fund over a ten year period. Here’s how that bet is going so far if you are curious.

Mr Buffett also said:

“Consistently buy an S&P 500 low-cost index fund, I think it’s the thing that makes the most sense practically all of the time.” – Warren Buffett* in a CNBC interview

So maybe someone should just do that?

RELATED BOOK:Warren Buffett: The Life, Lessons & Rules For Success

The simplest diversified investment portfolio would be one with a single investment holding – like the S&P 500 Index. Investors interested in this option can find good funds that track the S&P 500 Index or that holds US large cap stocks. Just one of several options would be Vanguard’s S&P 500 ETF (VOO).

Simple 1-fund investment portfolio

Of course, a 100% stock investment can be very volatile. It could have large swings up and down, potentially in a short period of time.

Make sure you understand your risk tolerance as part of considering any specific portfolio allocation.

RELATED POST:Understanding Investing Risk and Your Risk Tolerance

Simple Portfolio Option #2

A portfolio just one step beyond a single-fund option is a two-fund solution.

I’m sure you’ve heard a lot of talk about using a balance of stocks and bonds in an investment portfolio. Bonds help lower the volatility of a portfolio while stocks provide the upside performance.

That’s a very easy portfolio to implement – without picking a single stock or bond.


Buy two ETFs, one that represents the total US stock market and another representing the total US bond market. With those two funds, you just need to decide what percentage of your portfolio you want to be allocated to stocks vs bonds.

Two popular low-cost ETFs to consider would be Vanguard’s Total Stock Market ETF (VTI) and Vanguard’s Total Bond Market ETF (BND).

So, for example, if you determined that the best portfolio for you was a 60/40 stock/bond mix, you could easily pull that off with these two funds. That simple 2-fund portfolio would look like this:

Simple 2-fund investment portfolio

RELATED BOOK:The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich

Simple Portfolio Option #3

Just one step further in complexity – but still incredibly simple – is a 3-fund portfolio.

The 3-fund portfolio has been very popular with Bogleheads. Bogleheads is a group inspired by John Bogle (founder of Vanguard) but the group is not run or endorsed by him.

This third fund added would specifically be to gain some international exposure. Many international markets aren’t as mature as the US market and they’re growing very quickly. Sure, they can be rather volatile, but sometimes their swings run counter to US fluctuations. They might be up on a day that the US market is down – or vice versa. This can actually lower the total portfolio’s volatility.

From the Bogleheads’ 3-fund page: “For example, one could use Total Stock Market ETF (VTI), Vanguard Total International Stock Index Fund (VXUS) for international, and Vanguard Total Bond Market ETF (BND).”

Example: If you still wanted a 60/40 stock/bond mix, but split the stock portion between US and international companies. Like this:

Bogleheads 3-fund portfolio

RELATED BOOK:The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

What About You?

I just looked at our personal investment portfolio allocations. Granted, we’re in the middle of making some changes, but today this is how we stand:

Simple DIY Portfolios: Our Portfolio Allocation - September 2017

Now, admittedly we’re in more than three funds right now. We are in the process of simplifying though. Our portfolio is more complex than it needs to be and returns aren’t necessarily justifying the complexity.

I’m curious…

How many investments are in your portfolio right now? Do you feel like it is too many? Or too few? Would you consider a simplified portfolio model such as one of the ones mentioned above?

Are you following us on Facebook yet? If not, just click here to Like our page – we appreciate it!