What to buy: three funds

US stocks, international stocks and bonds, each in one cheap index fund. Together they own nearly every public company on earth. That's the whole portfolio.

How much of each

Pick how bumpy a ride you can sit through. Before age 40, every stop holds 70% or more in stocks.

Smoother ride For people who'd sell in a crash 43% US 27% international 30% bonds $20 a day for 30 years: $500,250 Worst year since 1928: -31.0% Standard What the big target-date funds hold before 40 55% US 35% international 10% bonds $20 a day for 30 years: $602,539 Worst year since 1928: -39.2% All-in growth Only if you've held through a 30% drop 61% US 39% international 0% bonds $20 a day for 30 years: $662,423 Worst year since 1928: -43.3%

Your age

How the mix shifts as you age

US stocks
International stocks
Bonds

Dollar figures use the same real returns as the home page (Damodaran, 1928-2025). Worst years are Vanguard's historical model portfolios, 1928-2025, before inflation, read from Vanguard's chart (Vanguard). From 40, bonds follow Vanguard's target-date glide path to 50% at 65, or your stop, whichever is higher. In the last 5 years, part of the bonds moves to short-term TIPS (inflation-protected Treasuries), as Vanguard's funds do.

In a 401(k) without these funds? Pick the target-date index fund closest to the year you turn 65. It's the same idea in one fund.

The fund types, and the near-identical options

Pick the one your broker carries. 0.015 points of expense ratio on $100,000 is $15 a year, so it barely matters which.

US total stock market

Every public US company, about 3,500 of them, weighted by size. The core of the house portfolio.

Fund	Yearly cost	1 yr	5 yr	10 yr	As of
VTI Vanguard	0.030%	15.3%	12.6%	14.7%	2026-09-30
FSKAX Fidelity	0.015%	15.3%	12.6%	14.7%	2026-09-30
SWTSX Schwab	0.030%	15.2%	12.6%	14.6%	2026-09-30

S&P 500

The 500 biggest US companies, about 80% of the US market by value. Nearly the same returns as total market.

Fund	Yearly cost	1 yr	5 yr	10 yr	As of
VOO Vanguard	0.030%	15.7%	13.8%	15.3%	2026-09-30
FXAIX Fidelity	0.015%	15.7%	13.8%	15.3%	2026-09-30
SWPPX Schwab	0.020%	15.8%	13.8%	15.3%	2026-09-30

International stocks

Companies outside the US, developed and emerging markets. The US is 62% of world stock value, so this covers the other 38%. Schwab's SWISX skips emerging markets, so prefer the other two if you can.

Fund	Yearly cost	1 yr	5 yr	10 yr	As of
VXUS Vanguard	0.050%	18.5%	9.3%	9.2%	2026-09-30
FTIHX Fidelity	0.060%	18.8%	9.3%	9.1%	2026-09-30
SWISX Schwab	0.060%	14.8%	9.4%	9.1%	2026-09-30

US bonds

US government and high-grade company bonds. It falls less than stocks in a crash, which is what makes holding on easier.

Fund	Yearly cost	1 yr	5 yr	10 yr	As of
BND Vanguard	0.030%	-1.8%	-0.6%	1.1%	2026-09-30
FXNAX Fidelity	0.025%	-1.8%	-0.7%	1.1%	2026-09-30
SCHZ Schwab	0.030%	-1.9%	-0.7%	1.1%	2026-09-30

Target-date 2060

All three funds in one, rebalanced for you and shifting toward bonds as the date nears. The lazy option inside a 401(k).

Fund	Yearly cost	1 yr	5 yr	10 yr	As of
VTTSX Vanguard	0.080%	14.9%	10.2%	11.4%	2026-09-30
FDKLX Fidelity	0.120%	15.2%	10.0%	11.4%	2026-09-30
SWYNX Schwab	0.080%	15.5%	10.4%	11.7%	2026-09-30

Annualized total returns, before inflation, from each issuer's page. Past returns don't predict future ones.

If you want more

The most data-backed alternative, and why it isn't our default

Historically, the strongest case for beating this mix is to hold all stocks, worldwide, for life and skip bonds. One research team found that would have left people with about 39% more at retirement than a target-date fund (Anarkulova, Cederburg and O'Doherty, 2025, not yet peer-reviewed). The catch: in their data, all-US-stock portfolios fell 68% on average at their worst, and the extra only shows up if you never sell. If you've held through a 30% drop without flinching, the All-in setting gets you most of the way there.

Tilting toward small, cheap companies is the other well-known option. It has earned 2.6% a year extra since 1900 (UBS Global Investment Returns Yearbook 2026), but much of the edge faded once it was published (McLean and Pontiff, 2016), and it went 13 years without paying, 2007 to 2020. It also takes more funds and costs more. We leave it out because simple is what people stick with.

Researchers disagree on

Whether you need bonds at all before retirement
How much international to hold, from about 30% to 67% of stocks
Whether small-company and value premiums will keep paying
Whether today's big-tech concentration means lower returns
How early to start adding bonds

What we never recommend

Picking stocks or sectors
Timing the market on forecasts
Leverage, gold or long-term bond funds as a core holding
More international than its share of the world market

We reviewed the research published from 2020 to October 2026. Nothing beats plain market-weighted global stocks for a beginner once costs and behavior are counted.