Educational content only. This article is for informational purposes and does not constitute personalized financial, tax, or investment advice. Consult a qualified professional for guidance specific to your situation.
TL;DR
- The strategy: Buy the entire global stock market with 1-2 low-cost index funds
- Fidelity & Vanguard: 100% VT (Vanguard Total World Stock ETF)
- Schwab: 60% SWTSX (US) + 40% SWISX (International)
- Why it works: Global diversification, automatic rebalancing, ~0.07% fees
Have a messy account with too many funds or high-cost investments? Book a free 15-min call and I'll help you streamline and plan through the tax consequences.
Note: These recommendations are for taxable brokerage accounts. For tax-advantaged accounts (401Ks, IRAs, HSAs), I recommend target date funds — see my retirement guide.
Buy the Entire Market
No one can consistently predict which stocks will win. Warren Buffett put it well: those who claim to know "are usually either self-delusional or snake-oil salesmen."
The solution? Buy everything. With a single low-cost index fund, you can own thousands of companies across the globe. You're essentially betting on global economic growth — which, historically, has been a very good bet.
This is exactly what robo-advisors do — they just charge you 0.25% for the privilege. You can do it yourself for ~0.07%.
Why not just buy QQQ or VOO? The expected return for stocks (the "equity risk premium") is about 5% above inflation — and this holds for any broad basket of stocks, whether it's the S&P 500, Nasdaq, or international markets. When you tilt toward one sector or region, you're adding risk you won't necessarily be compensated for. For example, if you hold 90% VT and 10% QQQ, you're just overweighting tech stocks that VT already contains. Keep it simple: own everything.
My Recommendations by Brokerage
Fidelity
100% VT (Vanguard Total World Stock ETF)
Fidelity allows automatic purchases of ETFs, so you can set up recurring investments into VT. One fund, entire global market, done.
Vanguard
100% VT (Vanguard Total World Stock ETF)
Same recommendation. VT tracks the FTSE Global All Cap Index and automatically maintains global market weights (~60% US, ~40% international).
Schwab
60% SWTSX + 40% SWISX
Schwab doesn't support automatic ETF purchases, so I recommend their mutual fund equivalents:
- SWTSX (Schwab Total Stock Market Index Fund) — 60%
- SWISX (Schwab International Index Fund) — 40%
Note: SWISX excludes emerging markets. For full global exposure, consider adding SCHE (Schwab Emerging Markets ETF).
Why Include International Stocks?
Some investors skip international because the US has outperformed since 2008. But that's recency bias. Markets move in cycles — and betting on one region is a gamble you don't need to take.
US vs. International market performance cycles (1975-2024). Leadership alternates.
In the early 1900s, the UK held 25% of global market value. Today it's ~4%. The US currently represents ~60% of global markets — but that won't be true forever.
By holding both, you don't have to predict which market will win next. You capture growth wherever it happens.
Need help cleaning up your portfolio?
If you have a messy account with too many funds, high-cost investments, or you're not sure how to transition without triggering taxes — I can help. One-time consultation, no ongoing fees.
Book a Free 15-Min CallWant to dive deeper into fund types? See my ETF vs. Mutual Fund comparison.
Next up
Automate Your Investments