Hey, this is Tom And what would you say if I told you that there's a very simple way to make money in the stock market consistently with the proven method that is extremely extremely simple. Now you would say Tom this is clickbait and I would challenge you to wait before you make that decision because I'm not clickbetting. There is a way, but there is something I Have to tell you and it goes along the lines of you know there's a very simple way to lose weight. You eat less, you work out more, you lose weight.

It's very, very simple. Is it easy? No. Now this system is not like losing weight. It's a lot easier, but it has its complications.

This system is called the three fund portfolio. It's an old bobblehead technique and it was I think came up in 1999. It's been around for more than two decades and its Simplicity is actually it's Brilliance All you do is you buy three things: U.S stock, Market non-us stock market and U.S bonds. And essentially when you did that by buying different ETFs what you've done, you've created massive diversification and very little overlap and this thing is going to work for you for years and decades and it's going to be very hard to beat with individual stock picking.

now. Some people use their strategy for their entire portfolio, some people use it for half their portfolio, and some people for five percent of their portfolio. I Think that this system should be implemented in every portfolio, but with a Twist and this is what I'm here to explain. So the other day I had a post for my community members on my patreon I have a group called Tom's Academy and on Tom's Academy I Teach people how to become a better long-term investor by teaching them principles, discipline, system, process, not giving them stock picks and one of the things that showed in there is I said hey, look guys, there's the system.

It's called the three Front portfolio. It's very, very good, but you can actually make it better and I explain to them Look, this is an old system. It came up in 1999. A lot has changed since 1999..

While the concepts are very, very similar which is, you know, if you buy broad Market if you go Diversified and you have little overlap, there's a good chance that you're going to beat most professional money managers. In fact, studies show that most of it will lose to you. But things have changed a little bit since 1999 and you might want to adjust that strategy to fit. And what do I mean by this now? look since 1999 to 2023, U.S Companies have changed a lot and people tend to see it sometimes negatively, sometimes positively.

It doesn't really matter For the purpose of this video. the US companies The ones that you have in the S P 500. All of them. All of them are multinational corporations.

which means that although they are registered in the US and they possibly have U.S management, these companies have massive exposures to every single Market that matters around the world. Facebook Google Amazon Massive multinational companies. It's not the same situation like we had in 1999. It's no longer U.S companies that are operating in the US massive multinational businesses.

So I'm arguing here that instead of buying broad Market us broad market non-us and U.S bonds, you can actually have number Two, which is non-us out of it because the S P 500 already includes companies that have exposure to all world. And if you have that exposure N1 which is the S P 500, there's no need for an overlap by buying more. World ETF The S P 500 is for all intensive purposes. It's a global ETF because it has companies that hire massive multinational corporations.

So if we do not need an overlap, so what do we replace the global with? Because so far you know it's been kind of the basic vocal strategy, right? S P 500 and then non-us including U.S stocks ETFs right? But the question is, what do you replace it with? And here's the problem. There's different strategies here, but my own personal one is that you can add a lot of spies and Pizzazz to this thing by going NASDAQ Now if you include the NASDAQ or similar high growth U.S based because remember U.S companies are multinational so you're getting all world. If you're going high growth us at number two instead of non-us stocks, what you're getting is a massive Global index with U.S Growth U.S S P 500 which is Broad market and U.S bonds I Think that's a better mixture than the old classic 1999 model. So my idea here is very very simple and I've said it my community and the only reason I'm making this video because when I said in my community people are like look, we know you you know we're members of The Academy we have you know our own little closed Club But this is important information and we think that you should make this video available for everybody and explain it because this value has to be out there And I agreed.

So I'm here sharing it with you and the courtesy is all to my community members the Toms Academy members because they've asked me to do so and to share this with you. So Daddy is very simple so instead instead of having a non-us stock CTF What we're going to put in is that let's say the Qqqm which is the NASDAQ 100. Now this is very interesting now. So at this point you would say well Tom Cool.

But how do we mix it up? Because this is a very different strategy than you know, the regular three fund portfolio. So what's the inner balance? Because the inner balance is important because you shouldn't assume that it should just be one-third one-third one-third Because it's not. So how do you mix it up? Well, it's based on your age and how close you are to retirement. In fact, I would argue it's more based on how close you are to retirement than your age.

but let's use age as as a metric to kind of create an objective table here. So think about this way: Bonds us S P 500 us NASDAQ How to split it up? Well if you are under 30 which some of you are I have audience below 30 I Hope then you shouldn't put more than 10 in bonds and then the rest is 45. 45 even split between the S P 500 and the NASDAQ even Steven If you're between 30 and 40, then you should go up to 20 bonds and then they have 40 in S P 500 or other Us broad market and then 40 in U.S Growth again, even Steven The only thing we changed here is we increased that Bond element from 10 to 20 by taking five percent of each. And here comes the interesting part: if you're 40 to 50 years old which is my age and most of you are in that age group for my channel, here's what you do now.

you stay with 20 bonds that shouldn't change, but in the composition of S P, 500 and NASDAQ, you literally take 20 off. You carve it out from the NASDAQ and you add it to the Sp100 so that S P 500 is now your biggest chunk with 60. And then you have 20 bonds. Twenty percent of NASDAQ.

you de-risking your portfolio, essentially prepping yourself as you get closer to retirement. Now, if you're 50 to 60 years old, then 50 percent goes into bonds, 25 in Broad Market 25 and basically a NASDAQ equivalent. and then 16 above 60 is in bonds. Thirty percent is 500 and 10 is in the NASDAQ.

So you're seeing the pattern here. and of course you know you can inter swap anything here. You don't have to use the NASDAQ. You can use similar growth.

You don't have to use the S P 500. You can use whatever. as long as this broad Market U.S Anything here is possible to if everything here is interchangeable, but the ideas are the same. So once every few years, if you have that portfolio, you go into the portfolio and you essentially balance it out.

So you make sure that as you get within an age group, you balance rebalance essentially your portfolio to match your risk profile based on your age, And some people may question this and may say, well, Tom Um, why are you going so heavy on the U.S Economy. Why do you do you see this as some sort of a way to get massive International exposure? Look at the market right now in the US. It's over hyped. It's so expensive Powell and the FED might destroy it.

What about interest rates? What about inflation? What about a possible recession in the United States All of this can bring down your portfolio massively well. Look, Number one: you buying the entire market. So you're not chasing individual stocks. You're not chasing entry points exit points.

So the idea is that the entire Market can collapse to the point where it does not exist anymore. I Highly doubt it. And number two, let's talk about every session. Okay, cool.

So I Think warning about a recession in general in the United States is a lot of fun. I mean I've made plenty of videos talking about it. It's fun. It's You know it's intriguing, but worrying about it as an investor and letting it you know impact your decisions.

As far as how to invest, it's a little bit like solving an algebra equation by chewing bubble gum. It's not really effective and I'll explain why. Um, even world-class economists can predict recessions properly. You know you got Michael Berry out there predicting 17 recessions out of the last three.

I Mean it's good PR for selling books or for YouTube videos and but you know it doesn't really have value for investors. Look at the S P 500 over the past 23 years since 1999, Um, the US had three major recessions and in those three major sessions, there was a lot of pain. But if you look at this, 500 in the long range from 1999 until 2023.. in those 23 24 years, the Sap Funded gave you on average 10 a year.

Now if you got an average annual return of 10 per year for Destiny 500 for 23 24 years, even though it saw three recession periods massive ones.com mortgage covered and still, it gave you 10. Sure, there's been bad years. there has been even a bad decade from 1999 to 2009. The S P 500 actually lost a percent in 10 years.

So there will be lost years. There will be lost decades, sometimes in extreme situations, but over the course of 23 24 years, which is what most of you have in your portfolio over that time, it's very hard to beat the S P 500. If you stay long enough in it, it's going to give you 10 a year. And that's why I'm saying you don't need Um Xus stocks ETFs Scp-500 NASDAQ pawns and then you just every few years rebalance it based on your age and increase bonds, decrease the risk by, you know, decreasing NASDAQ And that's it.

As simple as that, now, you can apply that to five percent of your money or a hundred percent of your money. It doesn't really matter, but the concept is the same. Now, if you want to learn more about strategies that will make you a better long-term investor, about how to dollar cost average into good companies, How to learn discipline, a system a process, how to eliminate emotions from your process as an investor. I Urge you to check out my Patreon page.

We have a new program called Tom's Academy there's literally two spots left. it's gonna be the last two spots and then it's going to be gone for a while. In that, Academy I teach all these things and I ask you to join especially since I have a no questions asked refund policy for 30 days. Joy for 29 days.

If you're not happy with it for any reason, I'll refund you immediately. Check it out, test it out! We're having a blast there learning about these things, learning how to read balance sheet, how to do due diligence, how to do valuations, how to do a DCF model everything. we're learning the skill set. I'm giving you tools to become better investors which is my mission.

And thank you for joining me today. If you want to check it out, Patreon.com Forward slash Tom Nash Thank you so much I'll see you next video.