The Total Stock Market Portfolio is the simplest and most cost-effective way for anyone to invest their money without overthinking it.
Home Country
Portfolio Charts is able to translate portfolio information to the local currency, inflation, and available funds of many different countries. Choose the home country where you live, and it will update every section of the page.
Asset Allocation
How to build a Total Stock Market Portfolio
| % | Asset Class |
|---|---|
| 100% | United States Large Cap Blend Stocks |
Asset Notes
- Many people promoting the Total Stock Market portfolio recommend an all-cap fund like VTI or VTSAX. To keep the data apples to apples across different markets, I used large cap blend which (by definition) compromises 85% of the market. You can model funds like VTI using 85% LCB and 15% SCB in the tools, but you may notice that the results are very similar.
Author
Multiple Authors
The Total Stock Market Portfolio is really more of a benchmark than something attributable to a single author. But for a compelling explanation, read the work of JL Collins in his book The Simple Path to Wealth.
Overview
In contrast to the common advice to never put all of your eggs in one basket, the Total Stock Market portfolio does just the opposite. Buy a single total market stock fund and for the most part just ignore it. It doesn’t get much simpler than that!
While hardcore asset allocation fans may think that sounds way too simplistic, there’s a lot of merit to the idea that young investors are best served by spending less time on fine tuning their portfolios and more time on earning and saving. The most articulate advocate for this line of thinking today is perhaps JL Collins. Here’s what he has to say about the idea of putting everything in a total market fund and calling it a day:
Owning 100% stocks like this is considered “very aggressive.” It is and you should be. You have decades ahead. Market ups and downs don’t matter ‘cause you avoid panic and stay the course. If anything, you recognize them as the “stocks on sale” buying opportunities they are. Perhaps 40 years from now you might want to add a Bond Index Fund to smooth out the ups and downs. Worry about that 40 years from now.
Collins has a substantial following in the FIRE community, and the Total Stock Market Portfolio (which he refers to as the Wealth Building Portfolio) is a staple among aggressive young investors looking to race to financial independence. It’s a good choice for people who want to truly keep it simple and who are willing and able to power through the inevitable drawdowns that come with a volatile asset allocation.
Performance
Since 1970, an investor in the United States holding the Total Stock Market earned an average 8.2% real return, with a baseline CAGR of 2.8% over 15 years. It supported a 3.8% safe withdrawal rate for 30 years and 3.4% indefinitely. Its worst peak-to-trough loss was 50%, and the longest a new investment spent below water was under 14 years.
Total Stock Market Portfolio Performance
| # | Metric | What it measures |
|---|---|---|
| 8.2% | Average return | Mean annual return after inflation |
| 2.8% | Baseline real return (15 years) | What 15-year stretches returned in the weaker outcomes |
| 3.8% | Safe withdrawal rate (30 years) | Highest spending rate that lasted 30 years in the worst case |
| 3.4% | Long-term withdrawal rate | The SWR floor over very long retirements |
| 50% | Deepest drawdown | Worst peak-to-trough loss after inflation |
| 14 years | Longest drawdown | Longest a new investment stayed below what you put in |
| 17.2% | Volatility (standard deviation) | Year-to-year variation in returns |
Stats for all home countries
Summary Stats by Home Country
| Home country | Average | Baseline | SWR | LTWR | Deepest | Longest | Volatility |
|---|---|---|---|---|---|---|---|
| Australia (aus) | 6.5% | 4.3% | 2.5% | 2.1% | 69% | 17 years | 20.1% |
| Canada (can) | 7.4% | 3.7% | 4.0% | 3.4% | 43% | 11 years | 16.3% |
| France (fra) | 8.2% | 3.4% | 3.5% | 2.8% | 48% | 16 years | 22.9% |
| Germany (deu) | 7.7% | 3.4% | 3.3% | 2.6% | 59% | 14 years | 23.6% |
| Italy (ita) | 6.0% | -1.1% | 1.6% | 1.2% | 82% | 28 years | 27.5% |
| Japan (jpn) | 7.6% | -2.3% | 1.7% | 1.2% | 68% | 34 years | 25.2% |
| Netherlands (nld) | 9.5% | 3.3% | 3.4% | 3.0% | 54% | 15 years | 21.4% |
| Spain (esp) | 7.0% | -1.0% | 1.6% | 1.3% | 82% | 26 years | 25.4% |
| Sweden (swe) | 12.2% | 6.8% | 4.0% | 3.6% | 60% | 13 years | 26.8% |
| Switzerland (che) | 7.7% | 3.7% | 3.5% | 3.1% | 53% | 16 years | 21.0% |
| United Kingdom (gbr) | 7.3% | 2.6% | 3.8% | 2.9% | 72% | 14 years | 21.4% |
| United States (usa) | 8.2% | 2.8% | 3.8% | 3.4% | 50% | 14 years | 17.2% |
To see this portfolio from a specific home country’s perspective, link readers to this page with ?home=COUNTRY added to the URL, using the codes shown in parentheses in the table above (e.g. ?home=aus). The portfolio itself is fixed by the page, so ?pk= has no effect here. More in the Guide for AI Assistants.
Charts
Different ways to visualize the Total Stock Market Portfolio
Comparisons
How the Total Stock Market Portfolio compares to other options
Alternatives
Portfolios with a similar structure or design intent
Global Market Portfolio — Tracks the full field rather than a single haystack
Classic 60-40 — Adds a bond fund to reduce risk
No-Brainer Portfolio — Mostly stocks, but with a little more variety
Articles
Insights that mention the Total Stock Market Portfolio
Discussion
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