Investment Strategies: One Fund Portfolio

What is a key reason the investment community often prefers two-fund or three-fund portfolios over a one-fund portfolio?

• They are less volatile.

• They have higher fees.

• They are easier to manage.

• They offer more diversification.

Which of the following is a characteristic of a target date fund?

• It only invests in international stocks.

• It maintains a constant stock-to-bond ratio.

• It adjusts its asset allocation as the investor ages.

• It is not available in retirement accounts.

What is the primary advantage of a flat fee financial advisor compared to a percentage fee advisor?

• They charge a fixed fee regardless of portfolio growth.

• They provide unlimited investment options.

• They charge less for larger portfolios.

• They offer more personalized advice.

Why might an investor choose VTI over VOO for a one-fund portfolio?

• VTI includes international stocks.

• VTI has a higher historical return.

• VTI includes small-cap stocks for added diversification.

• VTI is less volatile than VOO.

What should investors consider when investing in target date funds within a taxable account?

• The fund's performance history.

• The fund's management fees.

• The fund's international exposure.

• The potential for unexpected tax bills.

What is one major benefit of a one-fund portfolio?

• It eliminates the need for financial advisors.

• It guarantees higher returns.

• It simplifies investment decisions.

• It requires frequent rebalancing.

How does a one-fund portfolio help avoid behavioral pitfalls?

• By providing higher returns than other portfolios.

• By reducing the need to switch holdings frequently.

• By offering a wide range of investment options.

• By requiring constant monitoring.

What is a common issue with buying multiple ETFs?

• They are difficult to sell.

• They provide limited diversification.

• They can lead to overlapping holdings.

• They often have high management fees.

Why might an investor avoid adding individual stocks to a portfolio with ETFs like QQQ and VTI?

• It reduces the overall return.

• It increases the portfolio's volatility.

• It complicates tax reporting.

• It may lead to over-concentration in certain stocks.

What is a key advantage of passive investing with a one-fund portfolio?

• It guarantees no losses.

• It focuses on long-term growth with minimal effort.

• It allows for frequent trading.

• It requires active management.