What the three-fund portfolio is
The three-fund portfolio pairs one total U.S. stock market fund, one total international stock fund, and one total bond market fund. It's popularized by the Bogleheads community — named after Vanguard founder John Bogle — as a low-cost, broadly diversified approach. This page describes and lets you test the concept; it isn't a recommendation to use it as your own allocation.
Where the approach comes from
The Bogleheads forum grew out of discussions among followers of John Bogle's investing philosophy: broad diversification, low costs, and staying the course rather than trying to pick winning stocks or time the market. The three-fund portfolio is one of the community's most-referenced examples of that philosophy applied simply — three low-cost index funds instead of a large collection of individual holdings.
Why diversify across U.S., international, and bonds specifically
Each piece covers something the others don't: domestic equities capture the growth of the largest single economy's market, international equities mean the plan isn't dependent on one country's market cycle alone, and bonds tend to behave differently than equities during downturns — dampening volatility, though not eliminating it.
How the classic 60/20/20 split behaves historically
Testing this weighting shows how it changes both the smoothness of the ride and the growth ceiling compared to an all-equity portfolio. The “worst” historical starting month is worth examining just as closely as the median outcome — it's the scenario that actually stress-tests the plan.
Testing a withdrawal plan on top of the three-fund portfolio
The preset loaded above pairs the classic 60/20/20 split with a hypothetical $1,000 monthly withdrawal from a $250,000 starting balance — a concrete way to see the diversified portfolio under a real spending plan rather than pure growth. Removing the withdrawal (setting it to $0) shows the same allocation in pure accumulation mode instead, which is a useful comparison to run right after.
Adjusting the classic weights
60% U.S. / 20% international / 20% bonds is the traditional Bogleheads starting point for discussion, not a fixed rule — more equity-heavy variants (like 80/10/10) or more bond-heavy ones (like 40/20/40) are both common, generally shifting toward more bonds as a plan gets closer to needing the money. Testing a few weightings side by side shows directly how sensitive outcomes are to the split.
Trying it yourself
The exact 60/20/20 split above loads pre-filled when you click through. From there you can immediately edit tickers, weights, starting amount, or add a withdrawal or contribution to see how this core strategy behaves under a specific retirement or accumulation plan.