Wed Oct 08 2025, by Tyler Gardner

How to Build a Balanced Portfolio with Five Funds

I'm Tyler, a former financial advisor and portfolio manager. Now I make financial content for free so you don't have to pay for it.

1. Total U.S. Stock Market Fund

I would put 40% of my assets in a total U.S. stock market fund like Vanguard's VTI. This provides core growth, and you now own the entire U.S. stock market.

2. Total U.S. Bond Market

Next, I would allocate 20% of my assets in a total U.S. bond market fund like Fidelity's FBND. This provides both stability and income, buffering against stock volatility.

3. Total International Stock Fund

I would put 20% of my assets in a total international stock fund like Schwab's SWISX. This provides diversification and offers growth outside of the U.S.

4. Real Estate Index Fund

I would invest 10% of my assets in a real estate index fund like Vanguard's VNQ. This gives me an inflation hedge and income, diversifying the portfolio across one more asset class.

5. Money Market Fund

Finally, I’d place the remaining 10% in a money market fund like Fidelity's SPAXX. This provides liquidity and relative safety since I’ll always have cash on hand that’s not subject to market risk.

Conclusion

This type of portfolio has historically provided people with about a 5% real return and is relatively stable through most market conditions. If any of this is helpful, sign up for my free weekly newsletter by clicking the link in my bio. Each week, I’ll send you another money playbook that actually works.

Source