[dragontamer]

Two-portfolio theory is a good place to start.

VTI (Vanguard Total Stock Market) + BND (Vanguard Total Bond Market).

If you're saving for retirement, 30% BND + 70% VTI is a good starting point. Bonds grow slower than stocks, but stocks are riskier than bonds. Both grow over time.

VTI charges a 0.03% fee/year.

BND charges a 0.03% fee/year.

These are very low fees. The management style is hands-off (which is why its so low): VTI buys every stock in the stock market proportional to their size. BND buys every bond in the bond market proportional to their size (ie: mostly US Treasuries, but also some company-debts). Since these are broad and diversified, you should perform decidedly "average", which is fine.

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If you're saving for something near term (ex: new car, new house) that's within 5 years, you'll want to be more-bonds and fewer-stocks, 50/50 or maybe even 70% bonds / 30% stocks

Research bonds and stocks very closely. Learn their details, how companies work, dividends / profits are distributed (in particular, learn the theory between dividends vs capital expenditures vs stock buybacks).

For Bonds, learn about inflation risk, interest-rate risk, and more.

Once you understand the basics, feel free to branch out and put small amounts of money into specific stocks (or specific stock-sectors).

[throw8383833jj]

You've got some great advise that straight out of the investment handbook and has served investors very well for the last 100 years.

But, the mainstream investment handbook is a little out of date. With a 50 year Bond bubble brewing, bonds are close to an all time high right now, which means interest rates are close to all time lows. This means, you'll get very low returns from bonds, much lower than the last 50 years and almost certainly won't keep up with real inflation. Much of the bond returns from the last 50 yrs were from increasing bond prices/decreasing interest rates. those days are over. so, now we only have the yield left, which averages about 2% or so.

In a secular low rate world or ever low rates, risk assets, unfortunately are the only life boat available to rescue us from the onslaught of inflation. :(

this is Not financial advise.

[dragontamer]

I mean, that or TIPS / I-Bonds, if you really care about inflation.

There's a lot of instruments out there.

[chii]

The amount you can buy for I-bonds is too small for a retirement portfolio (which, i think needs to have a total asset of around $1million to make retirement self-sufficient).

[dragontamer]

So buy TIPS.

I-Bonds are super-safe since they have a minimum (currently a 0% minimum) rate. TIPS can go negative during periods of deflation. But if you actually want an inflation hedge, then TIPS exist for that reason.

[PopAlongKid]

>If you're saving for something near term (ex: new car, new house) that's within 5 years

A more conservative suggestion that I read once and have mostly adhered to says that any money you expect to need in the next five years should not be in the stock market at all.

>BND (Vanguard Total Bond Market)

Individual bonds and bond funds are two quite different types of investment and should not be considered equivalent.[0]

[0]https://www.fidelity.com/learning-center/investment-products...

[dragontamer]

> Individual bonds and bond funds are two quite different types of investment and should not be considered equivalent.[0]

Bond funds move based off of the sum of bonds that are inside of them.

Much like we programmers study assembly code to understand the machine, even though we write code in C++ or Javascript, any bond fund owner should study bonds to understand the underlying mechanics and risks of the overall fund.