I Want to Keep it Simple

You can be diversified with this portfolio of just two funds.

You benefit in several ways by avoiding investment clutter. You can keep your overall allocation on track with just a few mouse clicks per year. Sticking to a couple of broad funds will prevent you from getting distracted by niche bets (such as, say, a technology fund that’s on a tear). And by investing with index funds you’ll avoid the vain pursuit of hopping from one one-hit wonder to the next.

Rules for determining the right allocation among stocks and bonds seem to be as numerous as the stars in the sky. As a starting point, subtract your age from 120 to arrive at a stock allocation, then adjust your portfolio to fit your specific needs (the portfolio below may be appropriate for a 50-year-old).

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Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.