For even more control over your allocation, check out a three-fund portfolio. With this model portfolio, the stock allocation is divided between two mutual funds, one covering U.S. equities and the other covering international equities. This provides additional control over how much of the stock allocation goes to U.S. companies and how much is invested in overseas firms.

Using Vanguard mutual funds, the three fund portfolio could be implemented with the following mutual funds:

• Vanguard Total Stock Market Index Fund (VTSAX)
• Vanguard Total International Stock Index Fund (VTIAX)
• Vanguard Total Bond Market Index Fund (VBTLX)

Other mutual fund providers offer similar index funds that may be used to implement the three-fund portfolio. Fidelity, for example:

• Fidelity Zero Total Market Index Fund (FZROX)
• Fidelity Zero International Index Fund (FZILX)
• Fidelity U.S. Bond Index Fund (FXNAX)

Most major mutual fund companies offer similar index funds and target-date retirement funds that one could use to implement any of the three portfolios above.