Just-the-Basics Indexing with Mark Biller | FaithFi
September 17, 2026
Just-the-Basics Indexing with Mark Biller
Faith & Finance with Rob West
Investing can feel overwhelming. With countless funds, strategies, market forecasts, and opinions competing for attention, it’s easy to assume that successful investing requires constant analysis and a complicated portfolio.
But it doesn’t have to.
For decades, Sound Mind Investing has offered an indexing strategy called Just-the-Basics, designed around simplicity, diversification, and minimal maintenance. According to Mark Biller, Executive Editor and Senior Portfolio Manager at Sound Mind Investing, a straightforward indexing approach can also work alongside more active investment strategies.
The key may not be choosing between active investing and indexing, but understanding how both can fit in a well-designed portfolio.
Investing can feel overwhelming. With countless funds, strategies, market forecasts, and opinions competing for attention, it’s easy to assume that successful investing requires constant analysis and a complicated portfolio.
But it doesn’t have to.
For decades, Sound Mind Investing has offered an indexing strategy called Just-the-Basics, designed around simplicity, diversification, and minimal maintenance. According to Mark Biller, Executive Editor and Senior Portfolio Manager at Sound Mind Investing, a straightforward indexing approach can also work alongside more active investment strategies.
The key may not be choosing between active investing and indexing, but understanding how both can fit in a well-designed portfolio.
How Index Investing Works
Index investing begins with a simple idea: rather than trying to beat the market, investors seek to earn approximately the market’s return.
They typically accomplish this through low-cost index funds that track a particular market benchmark. Because these funds generally require less active management, their expenses tend to be lower than those of actively managed funds.
Over time, those lower costs can be significant. “Indexing is based on the idea that an investor is going to give up trying to beat the market in favor of just earning the market’s return,” Biller explains.
Just-the-Basics strategy takes that concept and keeps it intentionally simple. It uses three stock index funds and, when appropriate for the investor’s asset allocation, a bond index fund.
Once established, the strategy requires relatively little maintenance—typically an annual portfolio rebalance. That simplicity can make indexing especially appealing to investors who don’t want to continually monitor markets or make frequent investment decisions.
Active Investing or Indexing? Why Not Both?
Investors sometimes treat active management and indexing as competing philosophies. Either you try to outperform the market, or you simply track it.
SMI takes a different approach. Although the organization may be better known for its active strategies, Just-the-Basics was actually the first investing strategy introduced in the SMI newsletter more than three decades ago.
Rather than viewing active investing and indexing as an either-or decision, Biller suggests thinking in terms of both-and.
That approach can be particularly useful for investors whose workplace retirement plans offer mostly index funds. For example, an investor might use low-cost index funds inside a 401(k) while employing active strategies elsewhere in the portfolio.
Combining the two can create another layer of diversification without requiring every investment account to follow the same approach.
Why Use More Than One Stock Index Fund?
If simplicity is the goal, why not simply purchase a total stock market index fund?
That would certainly be easy. But SMI has historically used three separate stock index funds instead. There are practical reasons for that.
When Just-the-Basics was first introduced, total stock market index funds were not yet widely available. More importantly, many workplace retirement plans still do not offer a true total-market option.
Most plans, however, offer something similar to an S&P 500 index fund that tracks large U.S. companies. They may also offer a small-company fund and an international fund. Using several index funds makes it possible to build broader diversification even when a total-market fund isn’t available.
Otherwise, investors who substitute an S&P 500 fund for a total-market fund could end up concentrated primarily in large U.S. companies.
That concentration has worked especially well for much of the past 15 years, but recent performance does not necessarily predict future performance.
Why Diversification Still Matters
The dominance of large U.S. companies in recent years has raised questions about whether investors still need meaningful exposure to smaller companies and international markets.
SMI believes they do, although the organization has adjusted its allocations over time. The challenge is determining how much weight investors should place on recent history compared with longer-term market patterns.
Large-company stocks have been exceptionally strong during the past 15 years. But when SMI examined a longer 30-year period, the picture became more complicated.
Large companies slightly outperformed smaller and mid-sized companies over the full period. But when those 30 years were divided into two 15-year segments, the leadership changed. The more recent period favored large companies, while the earlier period favored the broader extended market.
That serves as an important reminder: market leadership can change.
Diversification means accepting that not every part of your portfolio will be the top performer at the same time. The goal is not necessarily to own only what has recently performed best, but to build a portfolio prepared for different market environments.
What About International Stocks?
International stocks present perhaps the more difficult diversification question.
Foreign stocks have significantly lagged U.S. stocks over much of the past few decades. That has caused some investors to wonder whether international exposure is still necessary.
Biller points to the concept of mean reversion—the tendency for an asset class that has significantly underperformed over a long period eventually to improve, while an asset class that has experienced exceptional performance may eventually cool.
Historically, U.S. and international stocks have alternated leadership over extended periods.
SMI has therefore maintained some international exposure while reducing its allocation. The Just-the-Basics strategy previously devoted 20% of its stock allocation to foreign investments; it has since reduced that figure to 10%.
The goal isn’t to assume that history will repeat itself perfectly. Instead, it’s to maintain some diversification while acknowledging the changing structure of global markets. And because the strategy is simple, investors can adjust those percentages based on their own situation and investment philosophy.
Indexing Can Help Investors Emotionally, Too
Diversification isn’t only about mathematics. It can also influence investor behavior.
Active investing inevitably produces periods when a strategy trails the broader market. During those times, investors may become frustrated and begin questioning their approach.
Biller describes a common temptation: when an active strategy underperforms, investors may think, “I should have just bought the index.”
Holding some indexed investments can reduce that all-or-nothing feeling. Part of the portfolio simply tracks the broader market while another portion follows an active strategy. That can make it psychologically easier to remain disciplined when one approach temporarily falls behind another.
And investor behavior matters. Even a sound strategy can fail to produce its intended results if an investor repeatedly abandons it based on short-term performance.
What Could a Simple Index Portfolio Look Like?
For investors interested in a basic indexing approach, the structure does not have to be complicated. The Just-the-Basics stock allocation is approximately:
60% large U.S. companies
30% smaller U.S. companies
10% international companies
Depending on an investor’s age, goals, risk tolerance, and overall financial situation, investors can also incorporate bonds into the portfolio. The exact percentages are less important than the underlying principle: build a diversified allocation you understand and can maintain consistently.
For many investors, similar funds may already be available inside their workplace retirement plan.
Simple Can Still Be Wise
Investing does not need to become a full-time job.
Active strategies may make sense in some situations. Other times, simply owning diversified, low-cost index funds is entirely appropriate. For many investors, the right answer may include elements of both.
What matters is having a thoughtful plan rather than constantly reacting to whatever has recently performed best.
As stewards of what God has entrusted to us, our goal isn’t to make investing unnecessarily complicated. It’s to make wise, informed decisions with patience, discipline, and an appropriate understanding of risk.
A simple, diversified investment strategy that you understand—and are prepared to stick with—can go a long way toward accomplishing that goal. To learn more about Sound Mind Investing’s Just-the-Basics strategy and other approaches to investing, visit SoundMindInvesting.org.
On Today’s Program, Rob Answers Listener Questions:
I’m 66, retired, and receiving Social Security, but I recently went back to work part time. My husband and I are debt-free but have only about $30,000 left in savings after cashing out our 401(k)s. Should I put most of my new income into my employer’s 401(k), or would another investment strategy make more sense?
Remember, you can call in to ask your questions every weekday at (800) 525-7000. Faith & Finance is also available on Moody Radio Network and American Family Radio. You can also visit FaithFi.com to connect with our online community and partner with us as we help more people live as faithful stewards of God’s resources.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
